Airlines cite high fuel costs as they raise fares
Thursday, February 16, 2012
DALLAS (AP) — If you’re buying an airline ticket soon, get ready to pay a few bucks more.
According to fare trackers, JetBlue Airways and Southwest Airlines are leading a round of price increases that will boost the base fare on many medium-length and long flights by $10 per round trip.
United, Delta, American and US Airways said Thursday that they had matched the increases.
J.P. Morgan analyst Jamie Baker, who tracks fares, said United and US Airways expanded the price increases to routes that Southwest doesn’t fly and included Denver, where Southwest had not raised prices. Rick Seaney, CEO of FareCompare.com, said at midday Thursday that all the largest U.S. airlines had raised fares.
Baker and Seaney said JetBlue took price increases that other airlines limited to a few markets such as Florida and expanded them nationwide last week. Southwest jumped in on Wednesday, they said.
Southwest spokeswoman Ashley Dillon said her airline raised prices to match JetBlue and “cover operating costs including the high price of jet fuel.”
Jet fuel accounts for about one-third of an airline’s costs — about the same as labor — and the bill has been rising along with crude oil prices. This week, the spot price for Gulf Coast jet fuel was 12.1 percent higher than a year ago and up 8.5 percent so far in 2012, according to the U.S. Energy Information Administration. That could mean more fare hikes ahead.
As a result of this yo-yo pricing, average fares don’t rise as fast as the number of increases would suggest. The average fare on Southwest, one of the few airlines that discloses such figures, was $140 in late 2011, up 7 percent from a year earlier.
Southwest carries more U.S. passengers than any airline and heavily influences prices that competitors charge on many routes.
In some cases, including several times late last year, other airlines attempted to raise prices but gave up when Southwest refused to go along. Airlines are reluctant to set prices higher than competitors, because many consumers will switch carriers to save just a few dollars.
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