American Airlines last night increased by $10 most domestic roundtrip airfares, the latest attempt by a major U.S. carrier to counterbalance rising fuel costs. The fate of this latest fare hike likely won't be known until Monday.
Most price increases this year had been selectively matched by some but not all of the major carriers. Lower-cost airlines also generally have not matched major carrier fare hikes. Absent full competitive matches, such pricing moves usually are rescinded.
"We expect that at least some of the majors will go along with this fare program," said Helane Becker, analyst at The Benchmark Co. "By Monday however, we would not be surprised to see it partially rolled back because the entire industry does not match."
American said each one-cent increase in the price of a gallon of jet fuel costs it an additional $30 million a year. The carrier said it, along with regional affiliates, spent more than $900 million on jet fuel in the second quarter, a 42 percent year-over-year increase. Crude oil on the New York Mercantile Exchange this week topped $43 per barrel and reached a 21-year high. It began today's trading session at $42.75