Posted on 01/19/2008 5:52:40 AM PST by thackney
Continental Airlines on Friday bumped up fares by as much as $20 round-trip on some routes, effectively doubling an increase from several weeks ago.
Although the increase was labeled a fuel surcharge, passengers only will see that the ticket prices are higher.
The latest move by Houston-based Continental, as well as United Airlines, matches a surcharge put in place Thursday by American and Delta, according to Rick Seaney of Farecompare.com.
Northwest and US Airways had yet to match the hike Friday afternoon, Seaney said. He said he expected those carriers to match over the weekend.
Tom Parsons of Bestfares.com said Friday he was taking a wait-and-see attitude.
"While there is a strong possibility that Northwest and US Airways will also match the fuel surcharge increase, nothing is written in stone until it actually happens," Parsons said in a release.
If any of the carriers don't match, the others would probably rescind the increase.
The increases have been added to leisure and business tickets but not to competitive lower-cost routes, Seaney said.
"The bottom line for air travelers is that deals are going to be harder to find in 2008, and business travelers and passengers in less competitive cities are going to absorb a disproportionate amount of airfare hikes," Seaney said in a note. "There is still some headroom for additional price increases in 2008, especially if a legacy airline merger occurs."
"Less competitive cities" refers to those not served by low-cost carriers such as Southwest Airlines.
The only things that may stop what Seaney called a "freight train" of increases in 2008 are a dip in fuel prices or softening in demand.
In announcing its fourth-quarter earnings on Thursday, Continental said it has not seen a slowdown in demand.
The increases come on the heels of a string of fare increases that airlines implemented during 2007 to try to offset climbing fuel prices.
The carrier's annualized fuel costs rise by about $45 million for each $1-per-barrel jump in the price of oil. Continental Chairman and Chief Executive Larry Kellner recently told employees the carrier was spending $170 per second on jet fuel.
I believe “fuel surcharges” is a much abused reason for raising prices. My garbage hauler, Waste Management, ran it into the ground by raising prices quarter after quarter. Fortunately for me, there is more than one waste hauler in my area.
Waste Management touts their “greeness” and charges their customers to pay for their political correctness. By switching companies my bill went from $63 quarterly to $42 quarterly. My new provider has the same fuel costs as the old one, what other explanation is there?
In addition I have told neighbors about my new hauler and have received a $10 credit on my bill for each one that switches. So far $40 off.
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