American raises US fares $10 per round trip

AP News
Posted: Mar 10, 2011 3:32 PM
American raises US fares $10 per round trip

American Airlines is raising U.S. base fares $10 per round trip.

If the increase sticks, it would be the seventh broad price hike this year by U.S. airlines, which say they need more revenue to offset rising fuel prices.

American Airlines spokesman Tim Smith confirmed that his airline raised prices Wednesday night. Delta said it was studying the move but had not matched American yet.

United, Continental, US Airways and two low-cost carriers, JetBlue Airways and AirTran Airways, said they had not raised prices. Southwest did not immediately comment.

American's latest fare increase also extended to Hawaii and Canada, where round-trip tickets rose by up to $21.

Airlines are also boosting fees. In the last two weeks, JetBlue raised the charge for checking a second bag to $35 from $30, and American upped the cost of making a flight reservation by phone to $25 from $20.

The Consumer Travel Alliance said Thursday that passengers paid U.S. airlines more than $9.2 billion in fees last year _ an average of $36.80 per round trip _ and many of the charges weren't disclosed to passengers when they bought their tickets.

The frequent fare increases so far in 2011 are reminiscent of 2008, when airlines pushed through many price hikes to keep up with skyrocketing fuel costs.

Rick Seaney, CEO of travel website, said if the pattern of 2008 holds, the airlines may attempt weekly raises through the end of April.

In most cases this year, the five so-called network airlines _ United, Continental, Delta, American and US Airways _ have quickly matched each other's price increases. The low-cost airlines have sometimes balked, which forces the network airlines to scale back prices on routes where they compete with Southwest or other low-cost airlines.

Southwest CEO Gary Kelly said this week that fare increases aren't keeping up with fuel prices, and he's not afraid that higher fares will drive passengers away. He noted that even after several fare hikes, Southwest's February traffic rose 13 percent over the same month last year.

Kelly said Southwest is on pace to spend $1.3 billion more on fuel than in 2010, when its bill came to $3.6 billion. That was 33 percent of all costs, just behind labor as Southwest's top expense.

Some fliers say higher fares are causing them to rethink vacation plans.

Krissi Adamietz, a manager for an environmental cleanup company in San Antonio, will travel to Europe on business this summer and considered taking her boyfriend.

"I doubt he'll go, as much as he wants to, because his ticket would cost at least $2,000," she said. "We could go on a cruise for $2,000."

Adamietz's co-worker, Brandi Mulkey, wants to visit her parents in Idaho and was stunned that the cheapest round-trip fare she could find was $450.

Idaho is a long drive, and Mulkey didn't visit last year, "so I'll end up biting the bullet and taking a trip." But she'll visit longer to get the most out of her investment.

Jeramiah German, a network manager in Kansas City for a big phone company, said he understands the airlines' plight. He said higher fares are a reasonable reaction to oil prices, and they won't keep him home.

"I just booked a flight to New York next month," German said. "I'd rather pay $400 than drive to New York."