United Raises Fares by Up to $50

By: AP
By: AP

NEW YORK (AP) -- United Airlines said Friday it boosted its ticket prices by as much as much as $50 round-trip, raising the stakes in the airline industry's battle against rapidly rising fuel costs.

Continental Airlines Inc. matched the increase Friday. At least one other carrier, US Airways Group Inc., said it was studying the move but hadn't yet decided if it would follow suit, a spokesman said.

It was the fourth week in a row that carriers have raised ticket prices, and the second round of increases led by Chicago-based United, the second-largest U.S. airline, in as many weeks, according to a tally by airline ticket pricing Web site FareCompare.com.

United's higher fares went into effect late Thursday, hours after crude oil prices surged to a new record of $111 a barrel. The increase is unusual for its size. Most recent fare increases have been limited to about $10 round-trip.

"It's like the jump in (oil prices) has totally changed the playing field," FareCompare.com Chief Executive Rick Seaney said.

United spokesman Robin Urbanski said the higher fares are based on the length of the flight, meaning that trips of under 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 added.

Atlanta and Seattle, 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.

"They obviously have some metrics that say, 'these are our less competitive markets,'" he said.

The move comes just a week after United raised 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."

As the price of oil has risen, carriers have tried to push more of their fuel costs onto consumers. Some of those increases have stuck, but stiff competition from low-cost airlines such as Southwest Airlines Co. and JetBlue Airways Corp. means many others have been rolled back after competing airlines failed to follow suit.

Continental spokeswoman Mary Clark said the Houston-based carrier matched the increase. Officials with Texas' two other airlines, American Airlines and Southwest Airlines, didn't immediately return calls seeking comment.

Atlanta-based Delta Air Lines has taken no action at this time, spokeswoman Chris Kelly said Friday.

By Friday afternoon, the price for a barrel of light, sweet crude for April delivery was trading 22 cents lower at $110.11 on the New York Mercantile Exchange after earlier rising to near $111.

Shares of United parent UAL Corp. fell $1.94, or 8.1 percent, to $22.12 in afternoon trading Friday. Other airline shares also fell.

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AP Business Writer Harry R. Weber in Atlanta, and AP Writers Bob Christie in Phoenix and Diana Heidgerd in Dallas contributed to this story.

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