The world’s largest airline, American Airlines, announced late last week that it expects September traffic to drop by 16.4 percent from August, as capacity drops by 9.7 percent.

Carriers generally reduce their schedule after the Labour Day long weekend, and other airlines have been making cuts too.  This year’s autumn schedules have been significantly lighter, as airlines try to match consumer demand.

American says that it expects third quarter unit revenue — revenue divided by capacity — to drop 14.5 percent to 15.5 percent compared with the same period last year.  The whole operation, including regional airlines, is expected to fall 14.3 percent to 15.3 percent.

Meanwhile, American is anticipating costs to rise from August to September, however, not as much as previously expected.  Excluding fuel and special items, the costs are expected to rise from 8.43 cents per available seat mile in August to 9.08 in September.

The airline has said that the increase is due to the reduced capacity, pension costs and the costs from efforts to improve reliability.  The costs would have risen even higher if not for cuts in smaller passenger-related expenses, foreign exchange and other cost-reduction strategies.

Airline financial analyst Hunter Keay wrote in a note that American’s drop in passenger revenue was less sever than competitors, due to the fact that the airline did not expand into new international markets last year where the recession has tightly gripped the air travel industry.