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5/27/2004

United boosts fuel fee

The Associated Press

CHICAGO — United Airlines raised the fuel surcharge that it adds to tickets by $10 per round trip Wednesday to a total of $30 on all North American flights.

The move came just days after United said in a U.S. Bankruptcy Court filing that it expects its fuel costs for 2004 to run $750 million higher than it estimated six months ago.

“Fuel costs have reached historical highs,” said John Tague, United’s executive vice president for marketing, sales and revenue. “Through a disciplined process, United has made remarkable progress in reducing its overall cost structure. Now we are being equally disciplined and responsive in making every reasonable effort to mitigate today’s challenging fuel environment.”

Airlines resort to fuel surcharges periodically when jet-fuel costs spike, and carriers are doing so this year as many are grappling with losses. There have been more than a dozen attempts in 2004 to raise fares that failed because competitors wouldn’t match them, according to airline travel analyst Terry Trippler.

Last month, Continental Airlines tried to boost its fuel surcharge from $20 to $30 per round trip for most travel within the United States and Canada — similar to United’s latest increase. But it dropped the increase after rivals stood firm. Continental rescinded another attempt this week.

“This one may have a chance of succeeding, just because of common sense,” said Trippler, president of Minneapolis-based Trippler and Associates.