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.
MATT QUINN contributes to the Wall Street Journal's corporate finance blog. He has also written extensively about banking and corporate finance for publications including Inc., American Banker, and Financial Week. He lives in Brooklyn, New York.