American Airlines raises fares

American Airlines sparked a new round of widespread airfare increases Thursday by raising U.S. round-trip prices $20, the biggest in a series of hikes carriers have attempted as oil prices surged.

The nation's biggest carrier said it raised fares in an attempt to recover some of the costs associated with the rising price of crude oil and jet fuel.

Delta Air Lines followed with its own increases Thursday. Most routes in the contiguous 48 states were affected, spokeswoman Betsy Talton said.

The latest round of fare hikes is the industry's seventh since Labor Day, and the largest of those in dollar terms, said Rick Seaney, chief executive of airline price tracking Web site FareCompare.com FareCompare.com.

"This last two months have been unprecedented, and a lot of it has to do with the unprecedented price of fuel," he said.

Other carriers, such as No. 2 United Airlines, said they were studying the move but had not yet decided whether to raise fares. Passengers flying on carriers such as Alaska Airlines that continue their journeys on American flights through code-sharing agreements might also see higher ticket prices.

In a separate move, AirTran Airways raised its fares by a smaller amount Wednesday. Spokeswoman Judy Graham-Weaver said the move by the low-cost carrier was "purely because of such record high fuel costs." Delta also matched that increase.

Major carriers typically follow their competitors in raising prices within a matter of days, if not hours, although stiff competition on popular routes mean airlines often repeal some of the increases almost as fast as they implement them.

In raising fares, airlines have consistently cited increasing fuel prices as justification for higher fares, and industrywide efforts to trim capacity have helped those fare hikes stick. Fuel is one of the industry's biggest costs.

The Air Transport Association, the industry's main trade group, said Thursday that higher fuel prices drove second-quarter costs 5.6 percent higher — more than twice the rate during the same period a year earlier.

"Soaring fuel prices, among other pressures, leave little room for error in maintaining today's modest profit margins," said ATA Chief Economist John Heimlich.

Crude oil futures have risen by about 25 percent since Labor Day. American estimated the change in the spot price of oil since the summer translates into more than $1 billion in annual costs.

Crude oil prices hit a new record overnight Thursday after the U.S. reported a surprisingly large drop in crude inventories. Light, sweet crude for December delivery settled at $93.49 a barrel on the New York Mercantile Exchange.

Shares of Fort Worth, Texas-based AMR Corp., American's parent company, fell 54 cents, or 2.3 percent, to $23.46. Other airline shares also fell.

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AP Business Writer Dan Caterinicchia in Washington contributed to this report.