Airlines hiking fares as fuel prices rise
DALLAS -- Southwest Airlines has joined a sweeping increase of $10 in the price of many domestic round-trip airfares, citing the need to offset high fuel prices.
Southwest's action over the weekend may have ensured success for a price hike by major airlines that seemed to be faltering. Southwest carries more U.S. passengers than any airline and wields great influence over prices.
It's the sixth time airlines have raised fares already this year. FareCompare.com CEO Rick Seaney says leisure travelers may now have to pay $260 for a ticket that cost $200 back on Jan. 1.
The airlines say they need the money. "As an industry, we are all feeling the cost pressures surrounding fuel prices," Southwest spokeswoman Ashley Dillon said Monday.
Jet fuel prices have risen more than 50 percent in the past year to more than $3 a gallon, although most airlines have offset some of the increase through hedging -- in effect, paying extra to lock in the top price they'll pay for some of their fuel.
The latest price increase started early last week. Delta Air Lines tried to raise many fares by up to $20 per round trip, but other big airlines sided with a $10 increase started by American Airlines.
Southwest waited three days before matching American's move on Friday night. Other airlines had rolled back fare hikes on routes where they compete with Southwest and other discount carriers, but they revived the full increase once Southwest raised prices too, Seaney said.
Low-cost airlines JetBlue, AirTran and Virgin America also raised prices, virtually assuring that the increase will become permanent, he said.
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