With the price of crude oil hovering above $90 a barrel, airlines are accelerating efforts to raise ticket prices to help offset the higher cost of fuel.
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AMR Corp.'s American Airlines, the world's largest carrier by traffic, succeeded in pushing through an unusually large fare increase announced Thursday. That increase of $20 on round-trip domestic fares was double the typical boosts made by American and many of its competitors.
Those airlines matched American's increase over the weekend.
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"Given surging crude prices, fare increases are occurring at a stepped up pace," said J.P. Morgan airline analyst Jamie Baker, who said he has also witnessed stepped up efforts from smaller airlines, including AirTran Holdings Inc. and JetBlue Airways Corp. in the past week.
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The price of refined jet fuel has risen more than 40% since January. That has put increasing pressure on an airline industry that just returned to profitability last year. Airlines have slashed their costs sufficiently to remain profitable this year. They have also curbed growth, which has helped the industry boost fares more successfully.
Don't look any further at this post, because there isn't a chart of oil that shows a near record price. In fact -- the chart that follows (which isn't important because it's not a core price) won't show you anything you need to know. Just go to another website, OK?
Great -- now you've looked at oil prices and have seen they are rising fast. But they're not part of core inflation, so just try to forget about this information, OK?
