As the price of a barrel of crude oil flirts with $60, more carriers are increasing fares or adding surcharges to cover fuel costs. United Airlines last night raised by 3 percent most domestic and international published fares. United excluded sale fares, select international fares and "contracted pricing" from the systemwide fare action. The first domestic summer increase follows heavy price activity this spring
(BTN, June 20) and various surcharge announcements by international carriers.
"With oil continuing to trade at historically high levels, all industries must act responsibly to offset rising costs," said John Tague, United executive vice president of marketing, sales and revenue. "We are confident our customers will understand that we must take appropriate measures to mitigate our higher fuel costs."
A barrel of crude oil on the New York Mercantile Exchange opened trading this morning just below $59.
North of the border, Air Canada this week said it will raise all one-way domestic fares between C$8 (US$6.50) and C$15 (US$12.18), depending on flight distance. The increases are scheduled to go into effect tomorrow. "Air Canada will continue to monitor fuel prices closely and adjust fares accordingly," the carrier said in a statement.
Air Canada rival WestJet followed suit yesterday by announcing "a temporary fuel surcharge" on domestic fares, citing 2005 fuel prices through May that were 38 percent higher than last year. Like Air Canada's, WestJet's price hike goes into affect tomorrow, with increases also ranging between C$8 (US$6.50) and C$15 (US$12.18) each way. Transborder fares to U.S. destinations are excluded. WestJet indicated it would eliminate the surcharge should fuel prices retreat.
Earlier this month, some foreign airlines introduced new or higher fuel surcharges, including both top Japanese carriers. All Nippon Airlines plans to raise its fuel surcharge, effective July 7. All transpacific flights would incur a $48 total surcharge per sector. Japan Airlines similarly will raise surcharges, effective July 1. Both carriers previously instituted fuel surcharges in February.