Airlines Give Up On Surcharge Increase

ATA started it and a whole bunch of air carriers joined in -- a $5.00 increase in the fuel surcharge tacked onto the price of a one-way fare. But three major airlines have decided it just won't fly. So American, United and US Airways have repealed the increase.

Airlines like Continental, which is sticking with the higher passenger fee, probably won't do so for long, according to www.bestfares.com editor Tom Parsons. He told Bloomberg News that airlines "are just not going to be able to stand up to this. They're going to have to yank it."

It's the eleventh time major airlines have tried to increase their fares over the past three months. In each case, low-fare carriers refused to climb on board, forcing a rollback.

"Nobody can afford to lose market share," said Thom Nulty, aviation consultant for The Corporate Solutions Group, a travel advisory firm in Orange County (CA), in an interview with the Denver Post.

Fuel costs are up 18-percent from a year ago at this time. Friday, Continental CEO Gordon Bethune warned higher fuel costs would erase his company's profit this year and probably drive up operating costs by $450 million.

FMI: www.eia.doe.gov/oil_gas/petroleum/info_glance/prices.html