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Airlines Raise Ticket Prices

Increased fuel costs cited as major reason.
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May 27, 2004--Fuel prices keep hammering away at businesses and consumers. On Wednesday, United Airlines, the world's second largest airline, raised its existing $10 fuel surcharge to $15 each way.

The increase applies to almost all of its North American flights and is effective immediately.

At the same time, America West announced a 5% increase on most fares for flights between mid-June and mid-August, peak travel months. The company gave increased demand and high fuel costs as the reasons.

Several other airlines followed United and America West's lead. Northwest and Continental Airlines matched the 5% hike in competitive markets. American Airlines, the largest airline in the world, adopted both the general rate increase and the fuel surcharge in certain markets.

All this comes at a time when United Airlines is battling bankruptcy again. In a legal brief filed last week, the company disclosed it expects its fuel costs for 2004 to be $750 million more than it projected six months ago.

The ultra-competitive airline industry has tried several times to raise prices this year. Efforts have failed because discounters like Southwest have rejected the moves.




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