January 15, 2008
Two more US airlines withdrew part of their USD$25 each-way fuel surcharges on Tuesday further jeopardizing the efforts of top carriers to pass on their fuel costs to customers, a fare tracker said.
United Airlines, which was the first to raise its surcharge last week, and American Airlines rolled back their increases. Delta Air Lines, which had withdrawn its increase, later reinstated it.
As of midday on Tuesday only Delta, Northwest Airlines and US Airways retained the increased surcharges. Continental Airlines rolled back an increase on Monday.
“The bottom line is that this attempted increase is most likely going to completely fail by the end of the day,” said FareCompare Chief Executive Rick Seaney.
Airlines have struggled in recent months to offset record high fuel prices through fare increases and surcharges.
The faltering surcharge casts doubt on the ability of top airlines to transfer their record high fuel costs to customers as economic weakness threatens to erode travel demand. Fare increases and surcharges require widespread matching in order to last.
Airline shares were broadly higher on Tuesday with the Amex airline index up 2.05 percent.
(Reuters)