American slashing flights to force up prices

American says it will cut seat miles 11-12 percent in the fourth quarter of this year. Other airlines, to lesser degrees, are likely to follow; it’s a way of raising costs without adding fuel surcharges.

At least it won’t be until the fourth quarter.

The move was recognized as a sign of weakness; AMR stock was off 15 percent.

And, it happened as part of the annual shareholder meeting of American parent AMR:

“The airline industry as it is constituted today was not built to withstand oil prices at $125 a barrel, and certainly not when record fuel expenses are coupled with a weak U.S. economy,” AMR Chief Executive Gerard Arpey said in a statement.

“The industry will not and cannot continue in its current state,” Arpey told shareholders at the company's annual meeting in Fort Worth, Texas on Wednesday.

So, does that mean American’s looking at merger possibilities?

Meanwhile, the move is in stark contrast to Southwest, which announced yesterday it is expanding service out of Denver.