American Airlines Raises International Fares

American Airlines raised prices on round-trip international tickets by $20 Tuesday, citing the rising price of jet fuel.

The higher fares, which were implemented as a "fuel surcharge," go into effect immediately and apply to all international destinations as well as Puerto Rico and the U.S. Virgin Islands. The latest price boost follows an increase in many domestic fares that American implemented last week.

Tim Smith, a spokesman for the Fort Worth-based airline, cited "the skyrocketing cost of jet fuel" and added that "there is no sign of any abatement in the situation at this point."

The industry is grappling with fuel prices that have overshadowed an otherwise busy summer travel season. Oil futures closed at $66.08 per barrel Tuesday on the New York Mercantile Exchange.

During the second quarter, American's fuel costs rose 47 percent compared with the previous year. Prices have risen even further since then, Smith said.

Many low-fare airlines, including Dallas-based Southwest Airlines, have also raised fares in recent days.

Southwest boosted prices on round-trip tickets by as much as $8, depending on the length of the trip.

Jamie Baker, an analyst with JP Morgan Securities, said the Southwest fare increase was welcome amid the carnage from fuel prices.

Noting in a research report that discount carriers are "among those causing the greatest agony for the scrappy legacy carriers," Baker wrote, "investors should gladly settle for a low-end fare increase in the face of $66 crude."

International travel has been a bright spot for most major airlines, including American, because they don't face competition from discount rivals like Southwest.

Gerard Arpey, American's chief executive, has said he plans to make international service, particularly expanded routes to Asia, a key part of the airline's business strategy.

Shares of AMR Corp., (ticker: AMR) the parent company of American Airlines, closed at $13.27, down 13 cents, in trading Tuesday.

Copyright 2005 Associated Press

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