AP Features, May 4th, 2007
United Airlines said Thursday it has raised most of its U.S. business-oriented fares by $25 to $50 one way and other fares by $5 to $10 each way, citing the high cost of fuel.
The increases took effect Wednesday night. It was not clear Thursday whether United's rivals intended to match.
The nation's No. 2 carrier raised premium and economy cabin walk-up and fully refundable fares by $50 one way and discounted first-class fares by $25 one way. It also instituted a $5 one-way increase on flights of up to 1,500 miles and a $10 one-way increase on flights of over 1,500 miles.
United spokeswoman Robin Urbanski cited the need "to optimize revenue and offset the cost of fuel, which is still our highest expense."
Among United's largest competitors, spokesmen for AMR Corp.'s American Airlines and Northwest Airlines Corp. said United's increase was under evaluation. Southwest Airlines Co. said it had no plans to match.
The fare boost comes at a time when reduced domestic passenger demand is slowing results for U.S. carriers, putting pressure on their revenues. For that reason, it was uncertain whether customers would accept the increase or turn elsewhere.
"Given growing evidence of consumer resistance to higher fares (and recent mixed results at pushing fares higher) we ascribe only a fair probability of success to United's latest effort," J.P. Morgan analyst Jamie Baker said in a report to investors.
United is in the process of relocating its headquarters to Chicago from suburban Elk Grove Village, Ill.
