Falling fuel prices could help the U.S. airline industry turn a profit in 2009, but most carriers are making cuts in passenger capacity to deal with a slowdown in business and leisure travel.

Delta Air Lines Inc. said it would shed 8% to 10% of available domestic seats next year and cut international flights by 3% to 5%. Delta is already reducing U.S. capacity by 12% this year as it and other airlines trim unprofitable routes. On the international front, Delta's cutback is a reversal from its average annual capacity growth...