United Raises International Fares

United Airlines today increased by 5 percent fares on most flights between U.S. and international destinations. It is unclear if the price hike, which was attributed to rising jet fuel costs, will draw competitive responses from other large airlines. Because of the highly competitive nature of the domestic market, U.S. major carriers this spring failed in numerous attempts to raise domestic fares, but international routes generally are devoid of low-cost competition. In fact, several international carriers this spring instituted or increased passenger fuel surcharges.

"Escalating fuel prices are a growing concern throughout the airline industry," said John Tague, United executive vice president for marketing, sales and revenue. "We must take the necessary steps to manage our exposure to this unprecedented rise in expense."

United's fare hike impacted all "non-sale" fares, including first, business, unrestricted economy, discount economy and most consolidator fares.

Analyst Helane Becker of The Benchmark Company today said strong international pricing is expected to last throughout the summer months. "Several weeks ago, Japan Air Lines and All Nippon Airways filed a 5 percent increase as of today on Japan originating flights," she said, noting that Northwest Airlines had filed matching fares. "The increase that United filed last night seems to be broader than this increase."

Northwest was not available for comment and no other carriers by press time had announced similar international pricing moves.