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United Increases Fuel Surcharge

Fuel surcharge now $25 each way

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United Airlines said on Friday it has increased its domestic fuel surcharge, bringing the total to USD$25 each way on all domestic routes.

The increase in the surcharge, which is in addition to the base air fare, varies depending on the market. In some markets where United faces low-cost competition the surcharge had been USD$5 or less. Elsewhere the surcharge had been USD$10.

The airline industry has been pressured by skyrocketing fuel costs as the price of oil hovers near USD$95 a barrel. Carriers have attempted to offset that expense with fare increases and surcharges.

Last week, United initiated a fare increase that was broadly matched by competitors. But some analysts predict carriers will have trouble raising fares if economic weakness erodes travel demand.

"Every penny increase in a gallon of jet fuel costs our industry USD$195 million annually, and while we operate more efficiently, we must be able to pass commodity costs on to customers, as other industries do," said UAL spokeswoman Robin Urbanski.

12 January 2008

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