United Air's $50 hike is sticking as carriers swallow big fuel bills. Airline stocks, meanwhile, aren't helped by the increasesThe big U.S. airlines appear to have successfully pushed through the largest fare hike in recent years, at least for now. United Air Lines imposed increases as high as $50 on long-haul round-trip tickets late on Mar. 13, with other airlines matching through the weekend. Low-fare airlines such as Southwest Airlines (LUV) and AirTran (AAI) did not follow suit, as is their custom.
"It may raise eyebrows, but I think people can easily see what is happening in the oil markets and they know jet fuel is directly related to what they're seeing at the gas pump," says Tim Wagner, a spokesman for Fort Worth-based American Airlines (AMR), the largest U.S. airline by revenue.
The hefty fare increase came the same week crude oil futures rocketed from $105 to above $111 per barrel. On Mar. 17, West Texas Intermediate rose to a record $111.80 before plunging more than $3 on worries that a U.S.-led squeeze in the financial markets could become a full-blown, worldwide economic slowdown. "It's not something that our fares of two years ago were built for," says Beth Harbin, a Southwest spokeswoman.
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