American Airlines can no longer afford to fly.

Or rather, it can no longer afford to carry your luggage. And it can't afford to fly about 12 percent of you that may have flown with American in recent months. It also can't handle its reservation service, and please don't ask it about carrying your pet or your golf clubs.

In response to the rapid rise in the cost of fuel, AMR, the parent of American Airlines, announced significant capacity reduction and a host of "revenue growth efforts," commonly known to passengers as "additional fees" and "higher fares."

American will cut back on as much as 12 percent of its domestic capacity by the end of this year, but it has not announced which routes will be impacted. It will retire as many as 85 planes from its mainline and regional fleets.

The airline will also try the novel approach of charging $15 for passengers' first checked bags, starting on June 15. It will raise fees for a range of other services, from reservation services to transporting pet and oversize bags.

It's easy to imagine the passenger revolt in response to these efforts. Their new mantra seems to be: If you want to fly American, pack light and be flexible with your destination. It's not our fault oil is at $130 a barrel.

To be fair, the soaring cost of oil has caused airlines' expenses to balloon, and it's no surprise that they have little choice but to pass much of that cost to their customers. American said it spent 12 cents per dollar of revenue on fuel in 2000. Today it spends three times that amount. It spends 10 percent more on fuel today than it did just a month ago.

American's announcement today sounded like a desperate plea to OPEC to do something about the price of oil. "The airline industry as it is constituted today was not built to withstand oil prices at $125 a barrel, and certainly not when record fuel expenses are coupled with a weak U.S. economy," said AMR chief Gerard Arpey in a statement.   

The efforts were meant to show shareholders that the company is taking action in response to the drastic rise in the cost of operating its business. Unsurprisingly, it had quite the opposite effect.

Shares of American Airlines plunged more than 15 percent on the news, delivering a double-whammy effect of simultaneously disappointing investors and alienating customers.