Tuesday, July 21, 2009

Foreign Airlines Increase Fuel Surcharges: U.S. Next?

Several foreign airlines are increasing fuel surcharges on passengers, raising the prospect that U.S. carriers could follow suit. Lufthansa German Airlines, Thai Airways, India's Jet Airways and Kingfisher, and airlines in Taiwan have announced surcharge increases for domestic and international routes in recent weeks, citing higher costs and lackluster revenue because of the low demand for air travel.
The increases — with Lufthansa raising its charge on domestic German and European flights by $4 to $34 a flight leg, but leaving it at $116 for trips to the USA — come as crude oil prices have crept back up 43% this year after dropping from record highs last July. Crude settled at $63.56 a barrel in New York on Friday.
U.S. airlines haven't followed their international competitors in raising surcharges on domestic routes, though they have on most international routes. What U.S. carriers spend on fuel began inching up this spring, according to Department of Transportation figures.

Click here to read full story. Source: Roger Yu, USA Today

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