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Delta to pass along fees, match UAL fare hikes:Posted By: Tom Braswell NEW YORK (Reuters) - Delta Air Lines Inc. (Other OTC:DALRQ - news) said on Friday it will start adding airport fees to its ticket prices on connecting flights and match a separate fare increase by UAL Corp.'s (Nasdaq:UAUA - news) United Airlines.The moves are the latest sign that airlines are getting bolder in trying to raise fares, which in recent years have failed to keep pace with surging fuel prices and have pushed most carriers deep into the red. Delta, which is operating under bankruptcy protection and lost more than $500 million in January and February, said passengers could pay $3.00 to $4.50 on each leg of flights that connect through airports charging the fees. For flights that involve connections at two airports, the charges could raise ticket prices by up to $9 each way, the No. 3 U.S. airline said. Separately, United said on Friday it had raised business fares by $50 each way in an effort to offset fuel costs. It also raised coach fares $2 to $4 each way in markets where it faces low-fare competition and $5 each way in other leisure markets, said spokeswoman Robin Urbanski. Delta said it matched UAL's price increase, while some other airlines said they were still studying it. The rise in ticket prices comes close on the heels of a round of fare increases by the major U.S. airlines earlier this month. Roger King, an analyst at CreditSights, said he expects other airlines to match the fare increase and expects to see more such moves in the coming months. "Everybody wants to raise fares ... It takes someone to get the ball rolling," King said. "I expect fares will continue to rise until people start to think twice about flying." American Airlines, which is controlled by AMR Corp. (NYSE:AMR - news), and Northwest Airlines Corp. (Other OTC:NWACQ - news) are also studying UAL's fares but have not yet matched them, the two companies said. CONTINENTAL REACTION EYED American Airlines spokesman Tim Smith said the No. 1 U.S. airline had made a similar decision to Delta's a week ago for its Chicago, Miami and St. Louis hubs but is studying the extent of Delta's action in passing along airport fees to passengers. Airlines began absorbing the fees to be competitive with rivals' flights that connected through airports that did not charge such fees or that were direct. Northwest Airlines, which filed for bankruptcy protection in September on the same day as Delta, is studying Delta's move, spokesman Dean Breest said. Northwest Airlines tried adding airport fees, called passenger facility charges, to its ticket prices last year, only to retreat when the move was not matched by all of its rivals, notably Continental Airlines Inc. (NYSE:CAL - news). Northwest said last year that the fees, which are imposed by local airports to fund improvements, cut its revenue by $80 to $100 million a year. "Continental did not go along in the past. The key is, will they go along this time?" said Terry Trippler, an analyst with travel Web site Cheapseats.com. "For the passenger, it's something they have been getting free, technically, that they shouldn't have been all this time." Continental is studying whether to start passing the fees on to passengers connecting through its Cleveland hub, said spokeswoman Julie King. Its main hub, Houston, does not impose a passenger facility charge. Courtesy Of: Yahoo! News The information reported above is property of Yahoo! inc. and reprinted or modified with legitimate permission. We thank Yahoo! inc. for the kind cooperation with us and other shareholders. |
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