CORRECTED-WRAPUP 1-U.S. airlines plan further capacity cuts

(Corrects figure in third to last paragraph to 29,000 from 20,000)

* More capacity reductions set at Delta, American Airlines

* Rising fuel prices add to pressure on carriers

By Karen Jacobs and Deepa Seetharaman

ATLANTA/NEW YORK, June 11 (Reuters) - Two major U.S. airlines, Delta Air Lines Inc (DAL.N) and American Airlines (AMR.N), will slash capacity this year as the recession erodes travel demand, the carriers said on Thursday.

The cuts, which were broadly expected, are likely to be matched by rivals. US Airways Group (LCC.N) and Continental Airlines (CAL.N) also signaled plans to cut the number of seats available for sale.

The airline industry has barely digested last year's deep capacity cuts. But experts say more are needed to bolster fares and help compensate for rising oil prices and weak demand.

"We think think fourth-quarter (capacity) will be down at least 12 percent over last year. Maybe even 15," said airline consultant Michael Boyd.

"Right now, capacity has not fallen to match decline in demand," he said.