Delta Raises Tickets $5 to Cover Fuel Increases

    March 23, 2006
    Delta initiated the increase last week, after Southwest Airlines, which made its name with low prices, raised its fares by up to $10 for a one-way ticket.

    Source The Salt Lake Tribune (Utah)

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    Mar. 22 -- Delta Air Lines, the predominate airline serving Salt Lake City International Airport, has raised air fares $5 one way, following similar increases by other airlines.

    "It was in response to continuing cost pressures, obviously of which fuel is the most outstanding," Delta spokesman Anthony Black said Tuesday.

    Delta initiated the increase last week, after Southwest Airlines, which made its name with low prices, raised its fares by up to $10 for a one-way ticket. Southwest is seeking to offset an expected $600 million jump in its jet fuel prices.

    Southwest's increase was matched by other airlines serving Salt Lake -- American, Continental, Northwest, United and US Airways, which merged with America West last year. JetBlue, another low-fare carrier, has also indicated that it needs higher ticket prices.

    Several analysts think more fare increases are likely this year. On Tuesday, Calyon Securities analyst Ray Neidl raised his outlook on most major airlines "on the belief that the recent ticket price increases will continue as we move through the spring."

    Fare increases that stick are a reversal of recent history. Airlines that raise fares usually withdraw them when competitors don't follow along.

    That appears to be changing. Jet fuel prices, which have more than doubled since 2000, have hurt most U.S. airlines. Delta and Northwest filed for Chapter 11 bankruptcy in September, citing high fuel prices. United emerged from bankruptcy last month.

    The record-high cost of fuel is the main reason why the airline industry lost $10 billion in 2005.

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