American Airlines Raises Fares To Keep Up WIth Oil

    April 29, 2005
    Chris Crum

American Airlines is increasing most domestic U.S. and U.S.-Canada fares by $5 one-way and $10 round-trip.

The carrier’s reason for doing so is to help offset the continuing high cost of jet fuel.

With oil remaining over $50 per barrel, all airlines have experienced significant increases in the cost of jet fuel.

According to a press release, each $1 rise in the price per barrel of crude oil costs American Airlines approximately $80 million a year.

American and its regional affiliates spent over $1.1 billion on fuel in the first quarter alone. That’s an increase of 43% from the same quarter last year.

“Clearly, the huge losses that the industry has experienced will continue until average fares begin to reflect the increased cost of providing air service,” said AMR’s Chairman and CEO Gerard Arpey.

The airline industry is expected to lose $5 billion this year at the least.

Chris is a staff writer for WebProNews. Visit WebProNews for the latest ebusiness news.