Rising oil prices hit holiday fliers
With packed flights and Americans still committed to air travel, airlines are increasing fares to compensate for soaring jet fuel prices.
NEW YORK (CNNMoney.com) — Holiday travelers are as likely to have record high oil prices bite them at 30,000 feet as they are at the gas pump.
Gasoline prices have lagged far behind the run-up in oil prices since Labor Day, but jet fuel prices have soared by about a quarter during that time.
And with strong demand for travel - the Air Transport Association estimates that 4 percent more American will be flying over the Thanksgiving travel period than did a year ago - airlines are passing on some of the higher costs to passengers in the form of higher fares and fuel surcharges.
Last week United Airlines (Charts, Fortune 500) raised fares $10 on most round-trip tickets, hikes that were matched by most of its old-line airline rivals known as network carriers, such as American Airlines (Charts, Fortune 500), Delta Air Lines (Charts, Fortune 500) and Continental (Charts, Fortune 500). Those increases followed a series of $20 fare hikes started by American announced Nov. 2, along with scattered increases in October.
Even bigger fare increases and fuel surcharges are being put into place on many international routes. Tom Parsons, president of Bestfares.com, said he’s seen some international routes where the fuel surcharge has more than doubled the published fare. The weak U.S. dollar is adding to higher fares on overseas routes by increasing travel to the U.S. The weak dollar also gives U.S. carriers greater pricing power when competing against overseas rivals.
