Little! Help!


Dec 21, 2002
AA can't even pass the higher fuel cost along to the passeneger.
Maybe the TWU can help!

American Airlines rescinds fare increase for fuel
Monday August 2, 11:30 am ET

DALLAS, Aug 2 (Reuters) - American Airlines has rescinded a $5, one-way increase in its domestic fares meant to offset record high fuel prices, after other carriers did not follow suit, the world's largest airline said on Monday.

American, a part of AMR Corp. (NYSE:AMR - News), raised prices last Thursday for most domestic and some international flights, but it rolled back almost all of those hikes over the weekend after the move was not followed industry-wide.

"We just couldn't be out of line with fares in the rest of the industry," said Tim Wagner, an airline spokesman.

Each 1 cent rise in the price of a gallon of jet fuel costs American Airlines more than $30 million a year, the carrier said.

In the second quarter of 2004, American and its regional affiliates spent more than $900 million on fuel, up nearly 42 percent year over year, the company said.

The rising price of fuel is leading airlines to intensify their cost-cutting plans. But several major U.S. airlines have cut costs so deeply to stave off or emerge from bankruptcy that they have almost no room to maneuver.

Airlines such as American and Continental (NYSE:CAL - News) have tried to increase ticket prices, but the higher fares have not stuck in a cut-throat marketplace where the difference of a few dollars will determine the airline a customer selects.

The higher fuel costs come during the peak summer travel season, making it difficult for the airlines to return to profitability during a period when they should be in the black.

Jet fuel, the second biggest cost for airlines after labor, accounts for 12 percent to 14 percent of operating expenses.