P.M. BRIEFING : American Airlines to Hike Fares Because of Soaring Cost of Fuel

American Airlines said today that it will increase its fares by 10% because of what it called the skyrocketing cost of fuel brought about by Iraq’s invasion of Kuwait.

Michael W. Gunn, the airline’s senior vice president for marketing, said the increase will go into effect Friday for flights in the continental United States, Hawaii and the Caribbean and on Aug. 15 for international flights.

“We regret the recent events in the Middle East have caused an increase in the costs of fuel, leading to an increase in our fare price. American Airlines wants to be fair, and we are especially sorry to do this, because higher fares will create hardships,” Gunn said.

The higher fares apply only to tickets that are bought after the increase goes into effect, Smith said.

Fuel costs make up 15% of American Airlines’ total budget, “but at the higher prices, we estimate it will be at least 20%,” Smith said. Pan American World Airways and Northwest Airlines have indicated they will follow suit.