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4 Airlines Back Off Fuel Surcharge Increase

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Bloomberg News

Published: January 23, 2008

Four of the five largest U.S. carriers, including AMR Corp.'s American Airlines, cut their round-trip fuel surcharge to $20, dropping an increase that briefly doubled the fee.

It was the second time this month that major U.S. carriers failed to raise the surcharge and tack more of their rising fuel expenses onto fares.

Only No. 4 Continental Airlines hadn't joined the rollback.

American, UAL Corp.'s United Airlines, Delta Air Lines and Northwest Airlines cut the fee to stay competitive with other carriers, representatives said. American, the world's largest carrier, led the move to raise the surcharge to $40 last week.

"In the past dozen air-fare and fuel-surcharge increase attempts, none have withstood a pullout by a legacy airline," Rick Seaney, chief executive officer of Dallas-based Web site Farecompare.com, said in an e-mail.

Discounter Southwest Airlines Co., No. 6 by traffic, usually doesn't join in industrywide fare moves. US Airways Group Inc., the seventh-biggest U.S. airline, joined the larger airlines in abandoning the surcharge increase.

Airlines are struggling with a 52 percent price surge for jet fuel during the past year.

On Jan. 15, the airlines rolled back a $30 round-trip increase in the surcharge initiated by United four days earlier.

LUFTHANSA OWNS JETBLUE STAKE

Deutsche Lufthansa, Europe's second-biggest airline, has completed its purchase of a 19 percent stake in New York-based discount carrier JetBlue Airways. Last month, German-based Lufthansa agreed to buy the stake for $300 million, giving the airline a partner to help steer U.S. customers to its trans-Atlantic flights. The move comes before a U.S.-European Union treaty that will loosen restrictions on services between the two regions by the end of March.

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