FuelClub Discount

Planning your family vacation for the summer? Haven’t flown in a few years? Be prepared for sticker shock.

The cost of air travel has risen substantially in the past few years, with fares increasing steadily and, more recently, airlines slapping fees on various services that were free.

In-flight food, checking multiple bags, flying standby, traveling with overweight luggage, and even sitting in an aisle seat or an exit row now cost extra on many carriers, including American Airlines, United Airlines, Delta Air Lines and others.
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As rising fuel prices propel air fares toward the stratosphere, most travelers would like nothing better than to see a new low-cost carrier with rock-bottom ticket prices.

Better reserve that idea for sometime in the future.

While past recessions have spawned ultra-cheap airlines, experts say the triple-digit oil prices that are pushing air travel out of reach for average Americans also will almost certainly keep a no-frills carrier from entering the market any time soon.

“When the economy is bad, it’s often a good time for startups because (out-of-work) pilots want to work, planes can be acquired for very little and people are wanting to pinch pennies,” said Alan Bender, professor of airline economics at Embry-Riddle Aeronautical University in Daytona Beach, Fla.

“But with fuel prices being what they are, I believe that kills the whole notion.”
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WestJet Airlines Ltd. is considering increasing its fares or adding a fuel surcharge to all tickets to combat soaring fuel prices.

Sean Durfy, the low-cost carrier’s president and chief executive, said WestJet has yet to put fuel charges on its tickets, and is instead trying to mitigate rapidly rising fuel prices by effectively managing costs, increasing utilization and raising fares where competitively possible.

In the first quarter, WestJet increased fares “probably three times,” Durfy told analysts in a conference call Tuesday. However, he said the true impact of fare increases don’t really offset the rise in fuel costs, which is the issue.
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AirTran Holdings Inc. boasts a 22 percent annual growth rate over the last five years and has nearly tripled its size from 2002.

So if AirTran says it’s time to slow down, things must be getting serious. And with a barrel of oil approaching $120, AirTran is saying it’s time to slow down.

“It is clear to us that our previous decisions to invest in growth and to invest in new airplanes has proven to be too aggressive for an oil environment that very few could have imagined just six months ago,” AirTran treasurer Arne Haak told investment analysts last week.
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United Airlines, the second largest U.S. carrier, increased almost all domestic airfares by 3-5%, due to surging fuel costs, The Associated Press reported Friday.

It was the third increase in the past two weeks, The AP reported, for United (NYSE: UAUA), which like the U.S.’s other major carriers, is struggling to maintain a viable business model amid the largest increase in aviation fuel costs since the world’s second oil shock in 1979-80.

Shares of United fell 82 cents to $14.58 on the news in Friday afternoon trading.

United’s latest fare hike takes place just two days after Delta Air Lines (NYSE: DAL) CEO Richard Anderson said domestic carriers will need to raise tickets 15-20% just to break even at existing fuel prices, The AP reported.
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Continental Airlines and most other major carriers matched fare increases of as much as 5 percent round trip Friday, following the lead of United Airlines.

The move comes as domestic carriers are looking for new revenue to combat escalating fuel costs.

Those costs this month helped propel Delta and Northwest airlines to announce a merger and have spurred talk of broader consolidation in the industry. But it remained unclear Friday how Houston-based Continental might participate.

The airline is still considering its “strategic options” in regard to mergers, Continental Chief Executive Larry Kellner told employees Friday in his weekly recorded message. He said he wanted to address rumors that have been swirling.
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