Oil Costs Push Air Fares Up

In a flurry of activity, several airlines have matched the American-initiated domestic airfare hike of $4 to $10 roundtrip, including Continental, Delta, United, US Airways, JetBlue, Alaska, AirTran, Air Canada and WestJet, according to Rick Seaney of FareCompare.com. Only Southwest and Frontier are still sitting on the sidelines, Seaney reported.

"United/Continental Airlines – as part of their matching of the American airfare hike – did drop their $6 round-trip fuel surcharge – in what appears to be related to the domestic airlines’ motto of 'never be a dollar more or less than your competitor unless you have a scheduling advantage' – a motto fostered by consumers’ inclination to comparison shop for airfares," FareCompare said.

Earlier, FareCompare said that its proprietary airfare analysis engine detected significant fare and fuel surcharge hike activity from several domestic U.S. airlines.

The move coincided with Brent crude prices hitting a two year high of $100/barrel, FareCompare said, noting other changes by AA and United.

• American Airlines initiated an airfare hike between $4 and $10 roundtrip on the bulk of their domestic route system
• United/Continental cautiously added a fuel surcharge of $6 roundtrip to a significant number of routes, being careful to tiptoe around the routes of low cost airlines and the cheapest of sale fares.

This was the third airfare hike attempt this year (and there were two in December 2010), FareCompare said. All in all, the four previous domestic airfare hikes in the past couple of months all met with varying degrees of success, Seaney, a respected analyst, said.

"Outside of peak travel 'miscellaneous' airline surcharges (charges for specific high volume travel periods), we haven’t seen domestic fuel surcharges since November 2008 when U.S. airlines dropped them from domestic airfares as fuel prices plummeted from summer highs of $140+/barrel that year," the site said.

FareCompare also said that JetBlue added a fuel surcharge to Puerto Rico and Caribbean flights of between $70 and $90 roundtrip, while American also increased prices to Canada by $22 roundtrip (matched by Air Canada) and also to Hawaii by $21 roundtrip.

Also both US Airways and Alaska Airlines (on its Canadian routes) began matching American’s hike, with Delta matching a smattering of the fuel surcharge increases, FareCompare reported.. Staying out of the fray for the moment are Southwest, AirTran and Frontier.

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