Nation: Fuel costs prompt airlines to raise fares

greenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread

Nation: Nation: Fuel costs prompt airlines to raise fa

The Associated Press

DALLAS (September 8, 2000 11:53 p.m. EDT http://www.nandotimes.com) - Four of the nation's five largest airlines have raised domestic fares by adding a surcharge of $20 per round trip, which they claim is needed to cover the higher cost of jet fuel.

Continental Airlines moved first, posting the higher domestic fares Thursday. By Friday, TWA and the nation's three largest carriers - United, American and Delta Air Lines - had indicated they would match the increase.

Northwest Airlines, the No. 4 carrier, said it was watching the situation. Analysts said Northwest could torpedo the surcharge increase by refusing to go along.

"It's been something that has been thought about for months as we've watched the costs of fuel rise and rise and rise. But it's also because of the other airlines rising their prices raising their prices at the same time," said TWA spokeswoman Julia Bishop-Cross.

Jet fuel prices have been rising along with the price of crude oil, which reached 10-year highs this week. The benchmark futures contract for crude oil closed sharply lower Friday on the New York Mercantile Exchange, however, falling $1.76 to $33.63 per barrel.

The move this week by four of the major carriers doubled a $20-per-round-trip fuel surcharge they imposed in January.

"The surcharge is certainly justified by the enormous run-up in jet fuel costs," said PaineWebber airline analyst Sam Buttrick. "But that doesn't mean consumers will continue to book eagerly."

A spokesman for Southwest Airlines, the nation's largest discount carrier, said the Dallas-based airline did not plan to raise a $2-to-$6 per round trip fuel surcharge it enacted in March.

As a result, the major carriers were not raising their fuel surcharge on routes flown by Southwest and other discount carriers, said Tom Parsons, editor of travel Web site Bestfares.com.

Parsons predicted that the additional charge could push more travelers, especially families, to secondary airports served by the discount carriers. For example, when surcharges are included, fares from Washington's two airports to San Diego are now nearly double the fares from Southwest's hub at Baltimore-Washington International Airport, he said.

http://www.nandotimes.com/no_frames/nation/story/0,4455,500248700-500370328-502201333-0,00.html

In addition to the fuel surcharge in January, airlines pushed through a broad fare increase in March and a limited increase in May. But carriers saw occupancy rates on their planes rise this summer.

-- Martin Thompson (mthom1927@aol.com), September 09, 2000


Moderation questions? read the FAQ