Nov 1, 2007 9:16 am US/Central
American Airlines Ticket Prices Going Up
Higher Fuel Prices Cause $10 Increase Each Way
(AP)
American Airlines said Thursday it raised U.S. round-trip fares by $20, the biggest in a series of hikes carriers have pushed through in recent weeks as oil prices have surged.
American, the nation's biggest carrier, said it raised ticket prices on flights within the continental U.S. by $10 one-way in an attempt to recover some of the costs associated with the rising price of crude oil and jet fuel.
The increase is the industry's seventh since Labor Day, and the largest of those in dollar terms, said Rick Seaney, chief executive of airline pricing Web site FareCompare.com.
"American Airlines has been one of the most cautious of the legacy airlines during this unprecedented wave of increases," Seaney said in an email. "With this increase, however, they have thrown caution to the wind."
Recent fare increases, such as one launched be Continental Airlines Inc. last week, have 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.
Crude oil futures have risen by about 25 percent 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.
The price of oil 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 on the New York Mercantile Exchange, before dropping to $95.28 a barrel.
(© 2007 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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