After slashing domestic capacity by 10% during the busy holiday period, airlines could face another round of cuts in January, based on recent forecasts. Continental Airlines, Southwest Airlines and American Express all have reported lower-than-expected demand for 2009. With profits once again within reach, many carriers will likely respond with further capacity cuts rather than reducing fares to attract more passengers. "Managing your capacity is critical to controlling your revenues," says a Delta Air Lines spokeswoman.
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