AMR Turns Profit Again

Updated from 12:24 p.m. EDT

AMR(AMR Quote) reported a second consecutive quarterly profit for the first time in nearly six years, but said it nevertheless plans to reduce capacity for the fourth quarter and the coming year.

"The industry has lost $50 billion over five years," CEO Gerard Arpey said Tuesday during a conference call. "We should be cautious about declaring victory because of one or two quarters of profit."

American Airlines, the primary unit of AMR, said it will cut domestic capacity by more than 1% in the fourth quarter, while overall capacity will remain flat. For 2007, the airline plans to cut domestic capacity by more than 1%, with a 1% decrease in overall capacity. ...