American Airlines said passenger traffic dropped 0.4 percent in December and planes were not as full as its load factor decreased 3.4 percentage points in the holiday travel month.
The Fort Worth-based airline added more capacity, which grew 3.7 percent in December.
American also told investors that it expects unit revenues for the fourth quarter to be flat to down two percent. And as oil prices continue to drop, the carrier said it expects to pay between $2.51 and $2.56 per gallon for jet fuel in the fourth quarter.
Capacity for the full year was up 2.2 percent “primarily due to more active aircraft and larger gauge aircraft replacing smaller gauge legacy aircraft,” American said in a government filing made on Monday. American added 82 new airplanes to its mainline fleet in 2014 while retiring 69 aircraft. It also added 50 new aircraft to its regional partners while retiring 42 smaller regional airplanes.
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The company said it ended the year with $8.1 billion in total cash and investments, including $774 million in restricted cash.
Cowen and Company analyst Helane Becker said the drop in unit revenues for the fourth quarter are likely due to weakness in international travel, particularly to Europe.
“We expect American to continue to rationalize capacity in the international division given the weakness,” Becker wrote in a research note on Monday. “Heading into 4Q14 earnings season [unit revenue] trends will continue to be the focus as many fear [unit revenues] will decline as jet fuel declines.”