Rising fuel costs bump up airfares

Major U.S. airlines, citing higher fuel costs, are pushing through another round of fare increases.

American Airlines touched off the latest move, raising round-trip fares on its domestic routes by $20. It was quickly matched by United Airlines and its largest rivals.

Hawaiian has matched the increase on its Hawaii-mainland routes, and Aloha is likely to follow suit, according to two executives.

Airlines are charging more to offset a 51 percent jump this year in jet fuel prices. Fuel has passed labor as the top cost at some carriers.

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Hawaiian Airlines has followed and Aloha Airlines is likely to follow the lead of major domestic airlines in adding $20 to round-trip prices to offset fuel prices.

American Airlines, the world's largest carrier, made the first move on Thursday and was soon matched by its biggest U.S. rivals in the fare increase, which affects Hawaii-mainland flights as well as those between mainland cities.

The move is the biggest in a series of hikes U.S. carriers have tried since summer.

Continental Airlines and Northwest Airlines adopted the higher fares yesterday, joining Thursday's moves by United Airlines and Delta Air Lines to follow American.

US Airways, the No. 7 airline by traffic, also matched the increase.

Hawaiian has matched the increase for its Hawaii-mainland routes, said Keoni Wagner, vice president for public affairs.

Aloha Airlines is likely to match the increase, said Thom Nulty, senior vice president of marketing and sales. "Fuel costs are getting out of hand ... and it has to be passed on. There is no other alternative."

Fuel is now Aloha's No. 1 expense, above labor, said Stephanie Ackerman, senior vice president for public relations and government affairs. "We can no longer continue to absorb the additional cost."

The latest round of fare hikes is the industry's seventh since Labor Day, and the largest in dollar terms, said Rick Seaney, chief ex- ecutive of airline price tracking Web site FareCompare.com.

"This last two months have been unprecedented, and a lot of it has to do with the unprecedented price of fuel," he said.

Airlines are charging more to offset a 51 percent jump this year in jet fuel prices. Fuel has passed labor as the top cost at some carriers.

Even with the seven increases, though, the rate of inflation on airfares has not kept pace with energy costs. Crude oil is up 25 percent since Labor Day -- trading above $96 a barrel at one point this week -- but jet fuel is up about 13.5 percent and the cheapest type of fare is only up about 5 percent.