Air fares on the upswing as jet fuel costs increase

Air travelers can expect to pay even more.

U.S. and foreign airlines are adding fuel surcharges — or increasing base fares — to deal with the rising fuel cost of jet fuel, which is going up with the price of crude oil.

United Continental (UAL) added $6 in surcharges for round-trip tickets Monday, says Rick Seaney, CEO of FareCompare.com, which closely monitors fares.

American Airlines (AMR) also raised base fares by $4 to $10 round trip on most routes about the same time United added its fuel surcharge, Seaney says. US Airways (LCC), Delta Air Lines (DAL) and AirTran (AAI) have also since matched the increases on some routes.

United subsequently dropped its surcharge, but rolled it into an increase in the base fare as American did. This round of fare increases, the industry's fifth since December, will likely stick, Seaney says.

"They didn't know whether to match either (the surcharge) or (the base fare increase)," he says. "Either way, we're going to have a hike."

Domestic travelers haven't paid fuel surcharges since November of 2008, when airlines eliminated them by rolling them into fares.

But oil prices are higher — at about $91 a barrel on Wednesday — and more fuel charges are likely coming. Those to feel them first: travelers to small cities or on routes where large network airlines face little competition, Seaney says.

Airline executives have been sounding the alarm about rising fuel prices for weeks. The International Air Transportation Association said Wednesday that the industry's profit worldwide would fall by 40% this year to $9.1 billion from last year based on oil at $84 per barrel.

*
MONEY TIPS: Get our free Personal Finance e-mail newsletter
*
FLIGHT NEWS: Our Today in the Sky community
*
ASK THE CAPTAIN: Retired pilot John Cox answers travel questions

Fuel accounts for 27% of operating costs, and a dollar increase in the average oil price adds an additional $1.6 billion in costs, the association says.

Fuel surcharges on international tickets — a mainstay of international fares — are also rising. Jet Blue recently added a $70 fuel charge on round-trip flights to Puerto Rico, and $90 to other parts of the Caribbean. On Tuesday, Air France increased fuel surcharges by between $2.80 and $146 one way, depending on the flight length.

Travel to most destinations in Europe carries a surcharge of $360, a 29% increase from a year ago, according to Tom Parsons, CEO of Bestfares.com.

"With the problems in the Middle East, speculation is that fuel may going back up," he says. "Whether you call it a fuel surcharge or fare hike ... prices will likely be higher."