United Airlines Hikes Fuel Surcharge
By The Associated Press
NEW YORK (AP) – United Airlines said Wednesday it boosted ticket prices for the second time in a week, adding to its bet that customers will absorb an unrelenting rise in fuel costs.
The move – which came to light as oil prices topped $115 a barrel for the first time – could pressure other carriers to follow suit. But it also runs the risk of driving customers away at a time when they are growing fed up with air travel and coping with financial stresses of their own.
“There has to be a price point where the consumer says,’OK kids, we’re staying home,’” said Terry Trippler, of tripplertravel.com.
Since the start of the year, airlines have tried to raise ticket prices 12 times across most of their route networks, according to airfare research Web site FareCompare.com. Four of those increases immediately failed to stick after competitors refused to follow, and others at least partially unraveled as carriers jostled to find the right price to lure travelers.
Given that no one knows how high oil prices could go, even longtime industry observers are stumped when asked how high fares could rise.
“Prices just keep going up and up and up,” Trippler said. “If you’d asked me a year ago, I would have given you a much lower number than I’d give you today.”
Chicago-based United, the second largest U.S. carrier, said it was technically raising its fuel surcharge, not the base fare customers typically see in ads.
Travelers on some flights, such as Chicago to Minneapolis, who were paying a surcharge of $50 roundtrip will now see that charge increase to $70, spokeswoman Robin Urbanski said.
Fliers in markets where United previously did not apply a surcharge – mostly where the carrier competes head-to-head with low- cost carriers – will now be charged an additional $10 roundtrip. Urbanski said United faces competition from budget carriers like Southwest Airlines Co. on about 80 percent of its domestic routes.
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