American Airlines, Northwest, JetBlue raise fares
Posted on: Friday, 12 August 2005, 11:11 CDT
NEW YORK (Reuters) - American Airlines, Northwest Airlines and JetBlue Airways Corp. on Friday said they raised ticket prices in various markets, seeking to recoup some of their increased costs from record fuel prices.
The fare hikes follow similar moves by rivals including Delta Air Lines Inc., UAL Corp.'s United Airlines and Continental Airlines Inc., which began raising fares on Wednesday.
Most carriers said they raised fares to help mitigate the impact of soaring fuel costs. Crude oil futures added to recent gains on Friday, notching a fresh record above $66 a barrel.
"It had to happen," said Terry Trippler, airline expert at Cheapseats.com. "The price of crude oil is out of line obviously. Unfortunately the (fare) increases are not enough to cover what has occurred, and we can expect more increase as early as next week."
The airline industry has been struggling to combat costly fuel. And low-cost competition has made it difficult for airlines to pass along the expense to travelers.
No. 1 U.S. airline American, owned by AMR Corp., hiked fares on a range of domestic routes, with increases mostly ranging from $5 to $10 each way, spokesman Tim Smith said on Friday. American raised its fares on Thursday.
No. 4 U.S. carrier, Northwest said it matched its rivals fare hikes on Friday and has broadened its fare hikes to match price caps of $599 and $699 by a key rival on some routes.
Discount carrier JetBlue raised fares by $5 on flights to and from Florida and on some transcontinental flights, spokeswoman Jenny Dervin said. JetBlue's fare hike took effect Thursday.
The higher ticket prices did little to help the beleaguered industry's shares, as oil prices raced to record highs above $66 a barrel on Friday. Fuel has overtaken labor as the highest cost for many of the airlines, and analysts say some carriers could be driven into bankruptcy.
Delta shares were down 9 cents, or 5.03 percent, at $1.70, Continental was down 42 cents, or 2.87 percent, at $14.20, and AMR was down 18 cents, or 1.3 percent, at $13.22, all on the New York Stock Exchange. On Nasdaq, Northwest was down 10 cents, or 2.43 percent, at $4.01, and JetBlue was off 10 cents, or 0.53 percent, at $18.92.
Source: REUTERS
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