Airlines start 2008 with fare hike
Published: Saturday, January 5, 2008 at 6:01 a.m.
Last Modified: Saturday, January 5, 2008 at 12:00 a.m.
NEW YORK - As if on cue, airlines are responding to oil's latest surge by pushing ticket prices even higher.
Roundtrip domestic fares began rising $10 to $20 or more late Thursday, as crude futures crossed the once-unthinkable $100-a-barrel mark. Several major carriers increased prices, with each citing higher fuel costs as the reason.
The widespread increases follow nearly two dozen attempted systemwide fare hikes in 2007, or about double the number during the previous year, according to data compiled by FareCompare.com, which tracks airfare changes.
Passengers hoping for relief in the new year are likely to be disappointed.
"If oil stays at $100 a barrel, or if it creeps up even higher, I don't see how this is going to stop," FareCompare Chief Executive Rick Seaney said in an interview. "Airlines are going to be scrapping to keep their heads above water."
United Airlines, the second-largest U.S. carrier, led with the biggest round of increases Thursday night.
Tickets on short flights will cost $5 more one-way, while trips of more than 1,500 miles - such as Chicago to Las Vegas or Boston to Denver - will cost travelers $10 more one-way, spokeswoman Robin Urbanski said.
Delta Air Lines Inc. followed United's lead, matching the increase Friday.
Days before Christmas, UAL Corp.'s United doubled a $5 fuel surcharge it added a month earlier, effectively raising round-trip fares by $10. Urbanski said that surcharge remains in place in markets where it was matched by competitors.
Urbanski acknowledged fares in and out of some cities are higher than they used to be, but "are still relatively lower than a few years ago given that fuel is our highest expense."
Air Canada raised prices on tickets between the U.S. and Canada by 2 percent, according to spokesman John Reber. That means a ticket booked on Travelocity.com to fly between New York and Vancouver this Sunday and return Monday would cost about $30 extra.
Separately, AirTran Holdings Inc. doubled its one-way fuel surcharge to $10, spokeswoman Judy Graham-Weaver said. FareCompare data indicated Midwest Airlines has also added a surcharge this week, raising round-trip ticket prices by $10, but a spokesman for the carrier declined to comment on the matter.
"We all are facing ever increasing fuel costs and trying to keep up," AirTran's Graham-Weaver said.
The increases come as crude prices hover near all-time highs. On Friday, light, sweet crude for February delivery fell $1.27 to settle at $97.91 a barrel on the New York Mercantile Exchange.
The Air Transport Association said higher fuel costs will likely limit U.S. airlines' profits.
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