Airlines, Cruises Add Fuel Surcharges

Nov. 8, 2007 — -- Surging oil prices are rippling throughout the economy, prompting companies including airlines and cruise ships to pass fuel surcharges along to consumers.

United Airlines today announced it will add a surcharge of $5 each way to tickets for most domestic flights to offset the price of jet fuel. The second-largest U.S. carrier said the surcharge will apply to fares for travel within the United States, excluding Hawaii. (Hawaii flights already have a $25 one-way fuel surcharge.)

United said Wednesday it may ground up to 100 or more of its airplanes if soaring fuel prices ultimately cause consumers to buy fewer tickets.

United isn't alone in its actions. Last week, American Airlines increased its fuel surcharges on fares in the continental United States by $10 one way and $20 round trip.

German airline Lufthansa also announced today a 10 euro -- that's nearly $15 -- increase in its fuel surcharge on intercontinental flight. The increase will not apply to the airline's short- and mid-range flights.

China is also allowing its domestic airline to hike fares, according to the state news agency.

The passenger fuel surcharge will be allowed to rise from 50 yuan per passenger for flights within a distance of 800 kilometers to 60 yuan. For flights beyond 800 kilometers, the fee will rise from 80 yuan to 100 yuan. One Chinese yuan is about 13 cents.

U.S. airlines have finally started to show a profit after a string of bankruptcies and struggles since Sept. 11. But now, rising fuel costs are threatening to derail that recent success.

But it's not just the airlines that are tacking on fuel fees.

Carnival Corp. just announced that it will assess a $5 per day, per passenger, fuel surcharge on its North American cruise ships after Feb. 1. That would add $140 to the price of a 7-day cruise for a family of four. This applies to all the company's cruise lines: Carnival, Costa, Cunard, Holland America, Princess and Seabourn.

Based on past practice, it is likely that other airlines, cruise lines and other fuel-dependent businesses will start passing on some of the increased costs to consumers.