Citing significantly higher costs for aviation fuel last month, the Civil Aeronautics Board yesterday again gave airlines permission to raise foreign and domestic air fares.
Under the ageny's complicated fare-setting mechanism, yesterday's actions will allow most airlines to increase fares on domestic routes March 1 by approximately 2 percent above levels currently permitted by the CAB, according to airline and CAB spokesmen.
Technically, the board raised the cost adjustment factor in its basic industry fare level by 5.7 percent. It also modified its upward fare flexibility ceiling to allow airlines a discretionary increase above the basic fare level of $15 plus 30 percent as compared to the previously permissible $14 plus 30 percent.
But yesterday's combination of moves does not mean airline fares will rise by the same percentage as the increase in fare levels, since some airlines had taken advantage of a CAB action earlier this month to give them immediate, temporary fare relief that amounted to about a 3.8 percent increase for the airlines industrywide, the spokesmen said.
Possible fare increases differ in each market and for each airline since for competitive reasons airlines' fares on some routes are well below the CAB ceilings, while others' fares are right at the top of what's permissible.
The board also granted increases in the permitted foreign fare levels. Effective April 1, the fare level will go up 4.33 percent in the Atlantic, 6.03 percent in Latin America and 4.65 percent in the Pacific. The board's action does not mean that international fares will increase at the same rate since the airlines already have broad discretion to set their own fares around the levels, the board said.
Since December, the price of domestic jet fuel has risen from 90.6 cents a gallon to 94.1 cents and will be more than $1 by April 1, the board said.