DALLAS - American and Northwest Airlines raised their U.S. fares yesterday to help cope with record jet-fuel prices, after increases Thursday by four other carriers.
American increased prices $5 each way on most routes, a spokesman said. Northwest implemented a similar increase, as did low-cost carrier JetBlue Airways Corp. on some routes. Delta, United, Continental and US Airways raised fares a day earlier.
JetBlue raised fares $5 each way late Thursday on routes between the Northeast and Florida and on seven-day advance purchase fares on cross-country routes. America West Airlines matched a Delta Air Lines increase of $10 each way on some fares.
The airlines are reacting to a 58 percent surge this year in prices for jet fuel, which is usually their second-largest cost behind labor. Spot prices in New York rose to $1.96 a gallon yesterday and are up 28 cents in the past two weeks. Crude oil, from which the fuel is refined, briefly reached a record $67.10 a barrel on concern that demand will outstrip production.
"Airlines have to really increase prices," Ray Neidl, a Calyon Securities USA Inc. analyst in New York, said yesterday in an interview. "They cannot go on absorbing these fuel costs any longer. The airlines have been too meek in taking price increases, given the demand."
If the fare increases stick - and with Northwest involved they likely will - it would be the industry's 11th this year, with $5 each way the typical amount. Airlines usually back off higher ticket prices when rivals don't match them, and Northwest has historically been the spoiler for the other carriers.
The higher fares come as most airlines are experiencing increasing passenger traffic. American's traffic in July rose 8.1 percent from a year earlier. The gains were 6.1 percent at Delta and 5.4 percent at Northwest. Southwest Airlines, the largest low-fare carrier and the dominant airline at Baltimore-Washington International Airport, logged a 12 percent increase.
Fuel costs have contributed to continued losses for some of the biggest U.S. airlines, which have had combined net losses of $33 billion in the past four years. Fuel typically accounts for 10 percent to 20 percent of airline expenses, the Air Transport Association trade group said on its Web site. U.S. carriers will pay more than $28 billion in fuel expenses this year, rising $6.7 billion from 2004, the group said last month.
