American is again increasing fares

American Airlines is again increasing the fares for most of its domestic and U.S.-Canada flights to help offset the high cost of jet fuel, reported the Associated Press.

Fares are increasing $5 one-way and $10 round-trip effective immediately.

“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 Gerard Arpey, AMR’s chairman and chief executive, owner of American Airlines.  American, sited that each $1 increase in the price of a barrel of oil costs it about $80 million a year, reported AP.

The nation’s airlines have hiked fares several times in recent months in response to persistently high crude oil prices, with some carriers choosing to match the increases and others backing off. However, analysts have said more airlines are likely to keep the higher fares in place as oil remains high and the industry’s losses continue to mount into the billions of dollars.

As a normal practice American will watch to see if competitors match the fare hike and respond appropriately.