Southwest Airlines, the world's largest low-fare carrier, has increased most ticket prices by as much as $8 round trip as jet-fuel prices...
Southwest Airlines, the world’s largest low-fare carrier, has increased most ticket prices by as much as $8 round trip as jet-fuel prices linger near record highs.
The increases, effective Saturday, were $2 each way on flights of less than 600 miles, $3 on flights of 600 to 900 miles and $4 on flights over 900 miles, spokeswoman Linda Rutherford said yesterday. The Dallas-based airline did not change its fare cap of $299 each way, she said.
Southwest’s action followed increases of as much as $20 round trip late last week at carriers including American, Delta and Northwest to help offset rising fuel costs. Fuel typically is the second-largest expense for airlines, behind labor, and jet-fuel prices have climbed 55 percent this year to $1.92 a gallon.
“While we do have a good percentage of our fuel needs hedged, the amount where we are vulnerable has seen astronomical increases year over year,” Rutherford said.
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Southwest has 85 percent of its 2005 fuel needs hedged at a crude-oil price of $26 a barrel and has part of its fuel needs hedged each year through 2009. Hedges are financial instruments used to help lessen price spikes. Crude-oil futures, which sold at a record $67.10 a barrel Friday, traded at $66.27 yesterday in New York.
The largest airlines have raised fares 11 times this year. Southwest has boosted fares systemwide twice this year, and implemented two other limited increases.
Most other low-fare carriers, including JetBlue Airways, AirTran Airways, America West Airlines and Independence Air, also increased fares last week.
Northwest said yesterday that for “competitive reasons” it dropped $10 increases taken Friday on one-way fares purchased just before flying and on some leisure fares.