Continental Airlines Raises Fares Due to Fuel Costs Increase is Third in Six Months, Will Be Up to $40 Get Quote, Company Info: CAL By Simon Hirschfeld Reuters

NEW YORK (March 10) - Continental Airlines Inc. on Friday raised round-trip air fares by up to $40, the third rise in the past six months and one of the sharpest across-the-board increases in recent memory.

``We raised fares because of higher fuel costs,'' Continental spokeswoman Sarah Anthony said.

No other U.S. airline immediately followed Continental's lead.

The Continental move follows a recent industry-wide $20 fuel surcharge on domestic round-trip fares, and a $20 round-trip fare hike last October.

Continental, the No. 5 U.S. airline, boosted round-trip fares by $20 on flights of up to 500 miles, by $30 on flights of up to 1,000 miles, and by $40 on flights of more than 1,000 miles. One-way fares will rise by $10, $15 and $20, respectively.

Fuel prices remain at historically high levels, threatening airline profits, but several recent attempts by airlines to raise fares have failed.

All Continental routes are affected by the new fare rise, said Tom Parsons, who tracks airline fares for the online travel company Bestfares.com.

``This is the biggest fare hike in history,'' Parsons said.

Both Parsons and Terry Trippler of 1Travel.com expect Northwest Airlines Corp. to play the spoiler, either matching and thus supporting the new Continental hike, or refusing to go along and perhaps dooming the increase.

``We know if this one does not fly -- and the big spoiler could be Northwest -- they'll just try it again next week,'' Parsons said.

Oil recently rose above $34 a barrel, a nine-year high, although it was down to $31.45 this morning as major oil-producing nations appeared to relent on their tight rein on production.

Despite recent fare increases, airlines remain in the grip of a fierce fare war taking place almost exclusively on the Internet, where consumers can still find bargains, Parsons said.

America West Airlines, US Airways, Southwest Airlines, United Airlines, Delta Air Lines

and Northwest are all offering coast-to-coast flights for $198 round-trip, for instance, with purchases by March 22 and travel completed by Aug. 5, in most cases.

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-- Martin Thompson (mthom1927@aol.com), March 10, 2000