AMERICAN CUTS CAPACITY TO OFFSET FUEL COSTS

American Airlines is planning to reduce capacity this year to offset rising fuel costs with fewer flights and higher fares. Delta has also trimmed its first-quarter capacity guidance, although United Continental Holdings has said it has no plans to follow suit for now. Last week Southwest Airlines chief Gary Kelly said it too would have to reassess its plans when the price of fuel reached $3.30. American has hedged 35% of its 2011 fuel needs at an average price of $2.52 a gallon from January.