UPDATE 1-United Air adds fuel surcharge to most U.S. fares

(Adds background, share price)

CHICAGO, Nov 8 (Reuters) - United Airlines, a unit of UAL Corp (UAUA.O), said on Thursday it would add a surcharge of $5 each way to tickets for most domestic flights to offset the price of jet fuel.

The No. 2 U.S. carrier said the surcharge will be incorporated into fares for travel within the United States, excluding Hawaii.

Airlines have been grappling with soaring fuel costs, which are related to the price of crude oil, with a series of fare hikes. The surcharge is another way for United to pass along that growing expense to customers.

Nymex crude oil futures CLc1 notched a record high above $98.50 on Wednesday.

Every dollar increase in the price of crude oil increases United's annual costs by about $65 million, United said in a statement. Shares of UAL fell $1.61, or 3.83 percent, to $40.40 on Nasdaq at mid-afternoon.

((Reporting by Kyle Peterson, editing by Richard Chang; Reuters Messaging: kyle.peterson.reuters.com@reuters.net; e-mail: kyle.peterson@reuters.com; Tel: +1-312-408-8581)) Keywords: UAL SURCHARGE/

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