Continental Airlines today added $5 to the price of one-way fares in the 48 contiguous United States and $10 per roundtrip. The carrier did not describe the fare hike as an increase to the fuel surcharge now in place, but nevertheless cited the high cost of jet fuel. Continental partner Northwest Airlines "selectively matched" the fare hike, almost guaranteeing it will stick.
"Fuel prices, which we can't control, are the highest we have ever seen," said Jeff Misner, Continental senior vice president and CFO. "Meanwhile, Continental travelers in 2003 paid the lowest fares since 1994. This fare increase is a step toward matching fares with the cost of providing air travel in this environment."
The industry this year has had mixed results in raising prices to cover fuel costs. In January, an American Airlines-led fuel surcharge increase failed when only a few competitors matched, but AirTran Airways successfully implemented a price hike later in the month
(BTN, Feb. 9).
Almost without fail, systemwide domestic price hikes live or die based on whether or not they are matched by Northwest, the nation's fourth largest carrier. Airfare expert Terry Trippler of Trippler & Associates suggested it would have been difficult for Northwest to shoot down the fare increase this time around. "They are just beginning the battle with their unions for employee concessions, so it would be tough for Northwest not to go along," he said.