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Big U.S. airlines again hike fares

The increase of $4 to $10 per round trip — blamed on higher fuel costs — was initiated by Southwest and soon followed by American, Delta, United and others. It is the third rate hike this year.

March 27, 2012|By Hugo Martín, Los Angeles Times
  • Two previous fare hike attempts this year — one initiated by Delta on Jan. 17 and another by United on Feb. 15 — were rescinded after other airlines refused to match the increases. Above, Southwest airplanes are on the tarmac in Baltimore.
Two previous fare hike attempts this year — one initiated by Delta… (Elise Amendola, Associated…)

Airfares keep heading up.

In the latest rate hike for 2012, the nation's largest air carriers have increased fares $4 to $10 per round trip, citing higher fuel costs.

The bump up in prices — the third increase this year — was initiated Monday morning by Southwest Airlines, the nation's largest carrier of domestic passengers. American, Delta, US Airways, United, Frontier and Virgin America had all matched the Southwest hike by noon, according to FareCompare, a travel website that keeps track of such increases.

"Fuel prices are a significant hurdle for the airline industry," said Whitney Eichinger, a spokeswoman for Southwest.

The price of jet fuel has jumped 7% this year, according to government figures. A gallon of jet fuel sold last week for about $3.26, up from about $3.04 at the beginning of the year. In 2011, the nation's airlines paid nearly 30% more in fuel costs compared with the previous year.

Two previous fare hike attempts this year — one initiated by Delta on Jan. 17 and another by United on Feb. 15 — were rescinded after other airlines refused to match the increases.

It's not unusual for fare hikes to be withdrawn if other airlines don't go along. In 2011, of the 22 domestic fare increases that were attempted, 13 were rescinded.

More fare hikes are likely this year, said Rick Seaney, founder of FareCompare.

"I expect airlines to ramp up hikes as we hit the busy summer season, especially if oil prices remain high," Seaney said. But he predicted that air travelers would begin to resist the higher prices by flying less "when prices hit their 'no-go' point, which appears to be pretty close for many."

The International Air Transport Assn., a trade group for the world's airlines, announced last week that it had lowered its profit outlook for the industry for 2012 because of rising fuel prices. Despite a forecast of a 4.2% increase in global air travel demand, the trade group predicted that the world's airlines would earn a combined profit of $3 billion in 2012, a drop of $500 million from a December forecast.

"The risk of a worsening Eurozone crisis has been replaced by an equally toxic risk — rising oil prices," Tony Tyler, chief executive of the trade group, said in a statement. "Already, the damage is being felt with a downgrade in industry profits to $3.0 billion."

hugo.martin@latimes.com

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