Airlines Add Fuel Surcharges

American Airlines increased fares followed by United Continental Holdings adding a fuel surcharge, and other carriers have begun matching the hikes. The moves represent the third airfare increase of 2011, and the fifth since Dec. 15.

American's hikes range from $4 to $10 roundtrip on most of its domestic routes, according to Rick Seaney, chief executive officer of FareCompare, a company that monitors and tracks airfare activity.

United/Continental added fuel surcharges of $6 roundtrip to many routes, but was selective, "being careful to tiptoe around low-cost airlines and the cheapest of sale fares," Seaney says.

Seaney says this is the first appearance of domestic fuel charges since November 2008, when airlines dropped them after oil prices plunged from the summer highs of more than $140 per barrel.

Per U.S. Transportation Department rules, carriers are not allowed to break out fuel surcharges when they advertise or display fares -- so passengers will not see a surcharge listed, but rather a generic fare increase.

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The moves came as fuel prices spiked Tuesday night on the news of impending regime change in Egypt.

President Hosni Mubarak said he will not seek re-election in September.

During the latest round of conference calls to discuss 2010 earnings with investment analysts, airline chief executives said oil price increases must be passed on to consumers, or they will be forced to shrink capacity even further.

American also increased prices to Canada by $22 roundtrip and Hawaii by $21 roundtrip.

Delta, US Airways and Alaska Airlines have begun matching some of the increases, while Southwest, AirTran and Frontier are so far sitting on the sidelines.

UPDATE, Thursday: United/Continental dropped the $6 roundtrip fuel surcharge in favor of matching American's domestic fare increases of $4 to $10 roundtrip, according to FareCompare. CEO Rick Seaney cites a flurry of activity as Continental, Delta, United, US Airways, JetBlue, Alaska, AirTran, Air Canada and WestJet realigned their fares with American's. Only Southwest and JetBlue are still sitting this one out.

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