CORRECTED - American Airlines reduces capacity plans

(Corrects previous first-quarter capacity forecast in sixth paragraph)

NEW YORK, Feb 20 (Reuters) - American Airlines parent AMR Corp (AMR.N) reduced its capacity plans for 2008, as oil prices hover near record levels and the softening U.S. economy threatens to sap travel demand.

The world's largest carrier plans to increase capacity at its mainline operations by 0.2 percent this year, according to a filing with the U.S. Securities and Exchange Commission on Wednesday.

That is down from a forecast for a 1.0 percent increase on Jan. 16.

The new 2008 plans call for a 1.1 percent reduction in domestic capacity and a 2.5 percent increase in international capacity.

Previously, the company planned for a 0.4 percent reduction in domestic capacity and a 3.3 percent increase in international capacity this year.

In the first quarter, American is likewise slowing capacity, forecasting a dip of 0.6 percent compared with its previous forecast of a 0.9 percent increase.

By reducing the number of seats available, airlines hope to raise fares to offset soaring fuel prices. (Reporting by Chris Reiter, editing by Richard Chang)