AMR Raises Fuel Surcharge To USD$40

January 18, 2008

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American Airlines' parent AMR said on Thursday it had increased its domestic fuel surcharge to USD$40 per roundtrip.

An AMR spokesman said the increase, which doubles the surcharge on roundtrip tickets, does not apply to routes where the carrier faces low-fare competition.

A fuel surcharge initiated last week by United Airlines failed this week. Rival carriers matched the USD$50 surcharge but later withdrew their increases.

The airline industry hopes to combat high fuel costs with fare increases and surcharges, but a weakening US economy threatens to erode travel demand. Consequently, carriers have had difficulty initiating lasting fare increases.

"Just like the previous increase attempt last week, the fundamentals to sustain this increase are still in place and there is no reason why we won't see the five other legacy airlines match this increase shortly," said Rick Seaney, chief executive of fare tracker FareCompare.