SFGate: American Airlines' Fares Rise on Fuel

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Friday, October 12, 2007 (AP)
American Airlines' Fares Rise on Fuel



   (10-12) 14:18 PDT DALLAS (AP) --

   American Airlines raised many domestic fares by $5 each way but left
prices unchanged on routes where it competes with low-cost carriers.

   The Thursday night increase affected both advance-purchase tickets favor=
ed
by vacationers and more costly last-minute tickets aimed at business
travelers.

   Tim Smith, a spokesman for the airline owned by Fort Worth-based AMR
Corp., said the fare increase was needed to cover high fuel costs.

   Shares of AMR rose $1.23 cents, or 5.14 percent, to close at $25.14.

   Fall is typically a slower time for air travel, which could make carriers
reluctant to raise fares.

   But this week, UAL Corp.'s United Airlines raised fares to Hawaii and
other carriers went along, indicating that demand is firming, said Rick
Seaney, chief executive of travel Web site FareCompare.com.

   Jamie Baker, an analyst for JPMorgan, said the recent run-up in spot
prices for jet fuel made it highly likely that other network carriers
would match American's fare hike.

   Other carriers were studying American's increase before deciding whether
to match it.

   Betsy Talton, a spokeswoman for Delta Air Lines Inc., said the
Atlanta-based carrier had not made any fare increases Friday. United and
Continental Airlines Inc. had not raised fares by midday but declined to
rule out an increase. Northwest Airlines Corp. did not immediately return
calls. US Airways said they were studying the increase but had not yet
decided if they would match it.

   If the higher prices stick, it would mark the seventh such increase this
year, Baker said.

   Baker said American and Northwest were most likely to further reduce
flights because of their large numbers of fuel-inefficient narrow-body
jets. Last week, US Airways Group Inc. said it expected to cut capacity 4
percent in the fourth quarter compared with the same period last year. ----=
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Copyright 2007 AP

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