Bankrupt United Airlines has increased some of its fares by 5% after a surge in crude oil prices raised fuel costs.
The move comes days after the company lost its bid for a $1.1bn (£606m; 905m euro) US government handout.
Following the refusal, United Airlines said it would seek private cash to help it exit bankruptcy protection.
The industry has suffered in recent years as the war in Iraq, the Sars virus, slower global growth and fears of terrorist attack hurt demand.
United Airlines’ decision comes after other airlines – including British Airways, Qantas, Air New Zealand and Malaysia Airlines – have imposed fuel levies.
The rises will affect the cost of most tickets for United flights leaving the US for international destinations.
Last month, the International Air Travel Association’s chief Giovanni Bisignani warned that high fuel costs could push the industry into the red yet again.
The airline industry is not the only sector to feel the pinch. Travel company Thomas Cook has imposed a £5-a-head fee on new holiday bookings.
Crude prices have cooled from their record level of $42 a barrel that was reached in May, helped lower by higher supplies from Opec nations.
The rhetoric of the market also has calmed, with fewer analysts predicting the doomsday scenario that barrel prices are heading towards the $100 mark.
Even so, with prices at about $34-36 a barrel they still remain high enough to dent profitability.
“We must take the necessary steps to manage our exposure to this unprecedented rise in expense,” said John Tague, a vice-president at United Airlines.
“Escalating fuel prices are a growing concern throughout the airline industry.”
By: MEA380 - 1st July 2004 at 14:46
not good news 🙁
It seemes the Persian Gulf Airlines (Emirates, Saudi,…)are almost the only ones not suffering from the fuel prices, since fuel in that area is so cheap !!
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July 1, 2004 at 1:36 pm