American Airlines Raises Round-Trip Ticket Prices

Thursday, November 1st 2007, 11:42 am
By: News On 6

NEW YORK (AP) _ American Airlines sparked a new round of widespread airfare increases Thursday by raising U.S. round-trip prices $20, the biggest in a recent series of hikes carriers have pushed through as oil prices surged.

The nation's biggest carrier said Thursday it raised fares in an attempt to recover some of the costs associated with the rising price of crude oil and jet fuel.

Delta Air Lines and Alaska Airlines followed with their own increases Thursday, according to data provided by airline price tracking Web site Representatives for the two airlines did not immediately respond to requests for comment.

AirTran Airways spokeswoman Judy Graham-Weaver said the low-cost carrier raised its fares Wednesday and did not have immediate plans to raise them further. She said the move was ``purely because of such record high fuel costs.''

The latest round of fare hikes is the industry's seventh since Labor Day, and the largest of those in dollar terms, said Rick Seaney, chief executive of

``This last two months have been unprecedented, and a lot of it has to do with the unprecedented price of fuel,'' he said.

Recent fare increases, such as one launched be Continental Airlines Inc. last week, had raised most ticket prices by only half as much. Major carriers typically follow their competitors in raising prices within a matter of days, if not hours.

Airlines have consistently cited increasing fuel prices as justification for higher fares, and industrywide efforts to trim capacity have helped those fare hikes stick. Fuel is one of the industry's biggest costs.

The Air Transport Association, the industry's main trade group, said Thursday that higher fuel prices drove second-quarter costs 5.6% higher _ more than twice the rate during the same period a year earlier.

``Soaring fuel prices, among other pressures, leave little room for error in maintaining today's modest profit margins,'' said ATA Chief Economist John Heimlich.

Crude oil futures have risen by about 25% since Labor Day. American estimated the change in the spot price of oil since the summer translates into more than $1 billion in annual costs.

Crude oil prices hit a new record overnight Thursday after the U.S. reported a surprisingly large drop in crude inventories. Light, sweet crude for December delivery rose as high as $96.24 a barrel in electronic trading before dropping to $93.29 a barrel on the New York Mercantile Exchange.

Shares of Fort Worth, Texas-based AMR Corp., American's parent company, fell 46 cents to $23.54. Other airline shares also fell.