Carriers Raise Domestic Fares, Citing Fuel
Posted on: Thursday, 11 August 2005, 18:00 CDT
CHICAGO - Several U.S. airlines moved to raise domestic fares by $10 to $20 per round trip as oil prices resumed their upward trek Thursday, reaching the highest level in more than two decades.
The hike was initiated Wednesday night by United Airlines and Delta Air Lines Inc., and followed Thursday by US Airways. American Airlines and other carriers said they were studying the move and might match.
If the increase sticks, it will be at least the eighth time the industry has raised air fares since mid-February, when crude oil - the source of jet fuel - was selling for about $45 per barrel. On Thursday, the price of crude settled at $65.80 a barrel, the highest level since trading began on the New York Mercantile Exchange in 1983.
Airline travel analyst Terry Trippler predicted the latest fare boost would hold.
"When we have oil at $65 a barrel, it's got to happen," said Trippler, from Minneapolis. "Something again has to give. Even this increase is not enough to offset an additional $5 a barrel in oil, but it's better than nothing."
Delta increased round-trip fares on most flights by $20 because of fuel prices, spokeswoman Chris Kelly said. On flights where the Atlanta-based airline competes with low-cost carriers, Delta raised round-trip fares $6 to $10.
Delta, the nation's third-largest carrier behind American and United, has been trying to avoid a bankruptcy filing. Its losses have totaled nearly $10 billion since January 2001.
United, a unit of Elk Grove Village, Ill.-based UAL Corp., increased fares from $4 to $10 on round trip flights in the United States and Canada. United has been in Chapter 11 bankruptcy since 2002 and is on pace to spend over $1 billion more on fuel in 2005 than it did last year.
"This (increase) was to help offset the rising cost of fuel," spokeswoman Robin Urbanski said.
Continental Airlines spokeswoman Julie King said the Houston-based carrier matched Delta's increase, while US Airways Group Inc. spokeswoman Amy Kudwa said the Arlington, Va.-based airline imposed similar increases to those of United and Delta.
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AP Business Writer Harry R. Weber in Atlanta contributed to this report.
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On the Net:
http://www.united.com
http://www.delta.com
Source: Associated Press/AP Online
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