Two of the nation's biggest airlines boosted round-trip fares by as much as much as $50 heading into the weekend, raising the stakes in...
NEW YORK — Two of the nation’s biggest airlines boosted round-trip fares by as much as much as $50 heading into the weekend, raising the stakes in their fight against rapidly rising fuel costs and putting pressure on competitors to follow suit.
United Airlines led the latest round of increases late Thursday, hours after crude-oil prices surged to a record of $111 a barrel. Continental Airlines matched the increases Friday. At least two other carriers said they were studying the move.
It was the fourth week in a row that carriers have raised ticket prices, and the second round of increases led by United in as many weeks, according to a tally by airline ticket pricing Web site FareCompare.com.
The increase was among the largest in recent years, said Rick Seaney, chief executive of FareCompare.com.
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“We’re in completely uncharted territory for domestic-airfare increases,” Seaney said. “It’s like the jump in (oil prices) has totally changed the playing field.”
United spokesman Robin Urbanski said the higher fares are based on the length of the flight, meaning that trips of less than 500 miles will cost travelers $4 to $10 more round trip. Journeys of more than 1,500 miles are now $12 to $50 more expensive than before the increase, she said.
Seattle and Atlanta, Boston and Denver, and San Francisco and Philadelphia were among the thousands of city pairs that will now cost travelers $50 more round trip on United, Seaney said.
Other carriers will likely be tempted to match the increase, especially in cities where there is little competition, industry observers said.
However, airlines also run the risk of driving down demand ahead of the peak summer travel season if they push prices too high.
“The family going on vacation who now has to pay an extra $200 probably will think twice,” airline-industry consultant Robert Mann said.
United’s latest increase comes just a week after the carrier increased its domestic fuel surcharge by an additional $6 to $10 per round trip, effectively raising fares. United’s fuel surcharge now stands at $50 round trip in markets where the airline does not compete against low-cost carriers, Urbanski said.
“Fuel is our highest expense. The cost of it clearly continues to rise,” Urbanski said. “We must be able to pass along these costs just like other businesses do.”
Just like gasoline prices at the pump, jet-fuel prices have risen considerably along with the price of crude. New York Harbor spot jet fuel was going for $3.14 a gallon, up from $1.91 a year earlier, according to data from the Energy Information Administration. And also like gas at the pump, they could be set to move even higher.
Carriers have tried to push more of their fuel costs onto consumers in recent months. Some of those increases have stuck, but stiff competition from low-cost airlines such as Southwest Airlines and JetBlue Airways means many others have been rolled back after competing airlines failed to follow suit.
It’s not clear that the latest round of increases will stick, especially given their size. A spokeswoman for Southwest already said it was not raising fares.
“Nothing that’s happened in the last week would justify a $50 increase,” Mann said. “They’re either trying to make up for lost ground … or they’re looking to push through what they believe will be future fuel increases for which they’re not hedged.”
Tim Smith, spokesman for American Airlines, said the carrier is studying the increase but hasn’t taken action, and a spokeswoman for Delta Air Lines said it has taken no action at this time.
Representatives for Northwest Airlines and US Airways said the carriers were studying the move but hadn’t yet decided if they would follow United’s lead.
Associated Press reporters Harry R. Weber in Atlanta, Bob Christie in Phoenix and Diana Heidgerd in Dallas contributed to this story.