American Airlines boasted $932 million in profits during the first quarter of 2015, which is nearly double its profits from a year prior, the airline announced Friday.
Despite its strong financial performance, however, American has decided to cut its 2016 capacity by 0.6 percent by postponing the addition of more than 1,000 seats to its international routes. The extra seats were to come from five new Boeing 787 aircraft, four of which have been delayed to 2017 and one to 2018. American attributes the cuts to international travel, which it says has declined due to the impact of a strong U.S. dollar on foreign travelers' spending power.
The U.S. Travel Association called American's announcement "depressing" and called on Congress to take action to increase competition in American skies.
"It's depressing that actions that show disdain for travelers are the ones deemed to be the best business practices. The real irony is that American says it's cutting seats because of softening demand -- which we've been worried was inevitable all along because surveys show U.S. travelers would almost rather have a root canal than fly commercial," U.S. Travel Association President and CEO Roger Dow said in a statement
. "The untold story is that inaction in Washington is driving these decisions in the board room. This happens in the airline industry because major carriers are allowed to dominate routes and individual markets, keeping competitors out and enabling them to set prices with little or no downward pressure."
The U.S. Travel Association has been lobbying hard
in recent weeks for industry reform as part of the upcoming Federal Aviation Administration (FAA) reauthorization.
"We need an airport financing model
that allows airports to expand and let new carriers bid for service. Congress could get us there if it would just listen to common sense: A cut in airline ticket taxes coupled with a boost in the cap on the Passenger Facility Charge user fee would pave the way for the terminal upgrades that airlines have lobbied hard against expressly because they would help bring new competition," Dow continued. "Until Washington creates the circumstances in which 'capacity discipline' is not the profit-making virtue for airlines that it currently is, speculators will continue to reward them for it, which is harmful to an American economy and way of life that is deeply intertwined with travel."