Airlines raise fares
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An almost-unprecedented $100/barrel price of oil has led United Airlines to raise rates between $10 and $20 for domestic fares. And other airlines are following suit.
These increases follow on the tail of systemwide fare increases in 2007, according for FareCompare.com. If oil prices remain high, travelers can look forward to even more rate increases. The airlines seem to have no recourse, with low profit margins forcing them to struggle to keep their heads above water.
In general, short flights will suffer a smaller rate increase than longer, though fuel charges apply to all. Air Canada has raised rates 2 percent on flights between the U.S. and Canada. Several other regional airlines have also increased rates, so keep your eyes open.
Even with rate increases, the Air Transport Association says that the higher fuel costs will cause the nation’s airlines to earn about $500 million-$1.5 billion less than last year. It makes sense, since each $10 raise in crude oil barrel prices costs the airlines $18 per passenger. In 2007 alone, oil prices have increased $35/barrel, equivalent to a $65 per passenger in losses.
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