United expands fare hike to cover longer flights

United Airlines matches Southwest's fare increase, expands it to longer flights

Associated Press

DALLAS (AP) -- United Airlines is expanding a recent fare increase from short flights to longer ones, too.

On Tuesday United added $10 per round trip to base fares for flights longer than 500 miles. United and other big airlines on Friday matched Southwest Airlines Co.'s increase of $10 per round trip on shorter flights.

"United appears to be probing other airlines' appetite after the swift matching of the limited scope increase by Southwest Friday," said Rick Seaney, CEO of air-travel website FareCompare.com.

Southwest sounded hesitant about raising prices on longer trips.

"At this time, we do not plan to match on a systemwide basis," said Paul Flaningan, a spokesman for Dallas-based Southwest, which carries more U.S. passengers than anyone and wields great influence on fares.

Delta and JetBlue said that they had not matched the United increase. Others did not immediately return messages for comment.

United spokeswoman Christen David said the company raised prices to cover higher costs.

United's second-quarter operating costs rose 4 percent while revenue increased just 1.3 percent compared with a year earlier. Much of the increase reflected jet fuel prices, which slid from April until mid-June but have gone back up. Spot prices for fuel are now nearly back to their springtime highs, according to government figures.

Airlines sometimes undercut their own price increases by running fare sales to fill empty seats. Southwest, for example, is advertising a sale through Friday with prices starting at $69 each way.

Wall Street likes it when airlines raise prices. Airline stocks rallied Monday when it became apparent that the Southwest fare hike would stick, and several gained again in Tuesday afternoon trading.

Shares of United Continental Holdings Inc. rose 12 cents to close Tuesday trading at $19.57. Delta Air Lines Inc. added 25 cents, or 2.6 percent, to end at $9.71. Southwest added 2 cents to finish at $9.46. Alaska Air Group Inc. rose 5 cents to close at $34.82.

US Airways Group Inc. was helped by a comment from the CEO of JetBlue Airways Corp., who said his company wasn't interested in a merger. The comment was seen as raising the chances for a merger of US Airways and American Airlines parent AMR Corp., a deal that US Airways has been pursuing for months.

JetBlue shares ended unchanged at $5.27.

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