Airlines boost domestic long-haul fares

Thu Jan 12, 2012 5:03pm EST

A Delta Airlines MD-88 at Hartsfield-Jackson International Airport in Atlanta , Georgia, December 9, 2011.    REUTERS/Tami Chappell

A Delta Airlines MD-88 at Hartsfield-Jackson International Airport in Atlanta , Georgia, December 9, 2011.

Credit: Reuters/Tami Chappell

(Reuters) - Airlines are ringing in the new year with higher ticket prices after Delta Air Lines Inc (DAL.N) filed a domestic price increase of $20 roundtrip on longer-haul routes this week, a move that major U.S. rivals matched on Thursday.

A Delta spokesman said the second-largest U.S. airline has issued a fare hike. United Continental Holdings (UAL.N), AMR Corp's American Airlines (AAMRQ.PK), Southwest Airlines (LUV.N) and US Airways LCC.N all said they have matched it.

Fare tracker FareCompare.com called the move the first domestic airfare increase attempt for 2012.

Airlines have boosted fares and are looking for new revenue sources as higher oil prices raise costs and threaten profitability.

Oil prices initially rose on Thursday as the euro rallied and a Nigerian union threatened to shut down output, but they later eased on a report that the European Union could delay a ban on Iranian exports by six months. U.S. February crude oil was down 1.6 percent at $99.26 a barrel after earlier reaching above $102.

U.S. carriers have also raised ticket prices on flights to Europe in the wake of a disputed European law requiring airlines to pay for aircraft emissions.

American Airlines, United Continental and US Airways said last week they matched a $3 surcharge each way unveiled by Delta on fares purchased in the United States for flights between the United States and Europe. That move would help offset the cost of the European Union carbon emissions law that took effect this month.

Shares of the major U.S. carriers ended mostly higher on Thursday, with Delta up 3 percent at $8.87, United Continental up about 2.9 percent at $18.53 and US Airways up 2.4 percent at $6.05.

(Reporting by Karen Jacobs in Atlanta and Kyle Peterson in Chicago, editing by Matthew Lewis and Phil Berlowitz)

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