Airline Fares Raised as Fuel Costs Rise

Several major airlines raised fares Thursday as they grappled with ever-rising fuel prices that have overshadowed an otherwise bright summer travel season.

United Airlines, Delta Air Lines and Continental Airlines increased prices in some or all of their markets. The increases varied widely, depending on whether routes were flown by discount airlines such as Dallas-based Southwest Airlines.

Generally, Delta's fare increase was about $10 each way on most domestic flights, while lower increases were implemented in some competitive markets, said Anthony Black, a spokesman.

United's fare increase ranged from $2 to $5 on most routes, and Continental largely matched Delta's price increases.

Fort Worth-based American Airlines late Thursday matched the fare increases on somes routes, including many of the Delta $10 increases on round-trip tickets, spokesman Tim Smith said.

But Smith said fuel remains a serious problem for the entire industry.

"There is no sign that fuel prices are going to retreat anytime soon," he said. "And certainly our long-term goal is to match up revenue and costs more than we currently do."

The major hub airlines have had some success in raising prices this year, but fares nonetheless are still low by historic standards.

That's largely because their discount competitors, which have lower costs, are having an easier time weathering high fuel prices. And the nation's largest low-fare carrier, Southwest, is largely unaffected by the rise in oil prices thanks to a hedging program that has locked in the carrier's purchases at lower prices for the rest of the year.

Stock in AMR Corp. (ticker: AMR), American's parent, slipped 9 cents Thursday to close at $13.40 per share. Southwest (ticker: LUV) shares dropped 6 cents to finish at $13.70 per share.

Copyright 2005 Associated Press

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