American Airlines has begun a cautious restoration of capacity to its network, encouraged by indications that traffic is recovering. The second largest US airline will restore 41 round-trip flights from its Dallas/Fort Worth hub to 37 cities by March, with further additions planned by April.

American, like most US airlines, cut capacity by 20% following the 11 September terrorist attacks. The capacity increases will be gradual and targeted and will "not be appreciable from the percentage standpoint", the carrier says.

American is restoring capacity by increasing frequencies in current markets. On 31 January, the airline began one additional daily service to each of 10 US cities from Dallas/Fort Worth. On 2 March, the carrier will add 31 round-trip flights to 28 US and Mexican destinations, including additional flights from Boston and New York. American will also add three weekly flights from Dallas/Fort Worth to London Gatwick. Assuming the economy remains stable, more flights will be added in April, American says.

American is not alone in adding capacity. Low-cost carrier AirTran Airways plans to expand 20% this year as it takes delivery of up to 20 Boeing 717s, eight more than currently scheduled. Most of the growth will be in the northeast USA, to take advantage of opportunities created by capacity reductions at larger carriers.

The bulk of AirTran's 10-11% first quarter capacity growth will be at Baltimore/Washington, which will host 20 flights to eight destinations by the end of March. Most of the new services will match those offered by US Airways' Metrojet low-cost operation until it was shut late last year. AirTran is also looking at other northeast US cities formerly served by MetroJet.

The airline is in talks on accelerating 717 deliveries. AirTran chief executive Joe Leonard says they want to take 16 to 20 717s this year, an increase on the planned deliveries of one a month. AirTran may take 717s returned by American.

While the capacity increase demonstrate that prospects are improving, the carnage to industry balance sheets caused by 11 September and the recession continues to be revealed.

United reported one of the largest losses in the US airline industry with full year results $2.1 billion in the red. Fourth quarter losses totalled $308 million, although excluding special items such as government aid, the figure fell to losses of $640 million. Chief executive John Creighton said he saw signs that air travel was recovering. As a result United is adding 127 daily departures in April.

Delta Air Lines reported a net loss of $734 million for the fourth quarter and $1.2 billion for the full year including unusual items. These included charges totalling $695 million. Chief executive Leo Mullin expects the first quarter to be slightly better and believes Delta will return to profitability in the second half of the year, assuming the US economy recovers.

America West Airlines reported net losses of $61 million for the fourth quarter and $148 million for the year, including charges and government aid. In January, the cash-strapped airline closed on a $429 million loan backed by $380 million in federal loan guarantees.

Source: Flight International