AirTran Airways CEO Robert L. Fornaro told investors Wednesday the low-cost airline will continue to cut capacity and costs as well as sell some aircraft in order to cope with the devastatingly high price of jet fuel.

In a speech at a Merrill Lynch Global Transportation Conference in New York, Fornaro said Orlando, Fla.-based AirTran (NYSE: AAI) will cut overall capacity by 5 percent, a 15 percentage point swing from projections last September which had the airline growing by double digits.

"At this point the faster we can adapt the quicker we can recover and return to profitability," Fornaro said.

AirTran, the second-largest carrier at Baltimore/Washington International Thurgood Marshall Airport, also will try to restore some liquidity by selling aircraft. AirTran sold two planes in April and has plans to sell additional jets by year's end.

"Our focus is on monetizing the value we have embedded in those airplanes," Fornaro said.

AirTran had planned to end the year with a fleet of 147 jets, but has decided instead to cap the number of planes at 141.

First quarter revenues were good, though second quarter revenues were below expectations, in part because of a poor Easter holiday, he said. AirTran reported a net loss of $35 million in the first quarter. Bookings for summer look strong.

Ancillary fees, such as those on second checked bags, also have helped generate revenue. Fornaro said the airline has considered fees on first checked bags, but does not plan to levy such fees at this time.

Atlanta-based Delta Air Lines Inc. (NYSE: DAL), also hasn't adopted fees on the first checked piece of luggage.