Continental Airlines and United Air Lines said yesterday that they will follow Trans World Airline's lead in adding $3 to $7 to fares for domestic flights.
The reaction by the two major airlines appeared to ensure that the fare increase, or fuel surcharge as TWA called it, will stick -- at least through the summer when the airline traffic is heavy.
TWA announced the fare surcharge last week, saying that it was necessary to offset fuel cost increases. The airline noted that the cost of jet fuel had risen by more than 20 percent in the past six months. In addition to the increase for domestic flights, TWA also announced an $8 one-way surcharge on international flights and said that the surcharge would go up and down with the cost of fuel.
Continental and United said they would not increase fares on international flights. In addition, the two airlines did not directly tie their price increases to the cost of fuel but rolled them into fares. "We're not breaking it out as TWA has proposed," said United spokesman Dan Sheehy. But Continental said that fuel price increases of approximately 17 percent since the first of the year made the fare hike necessary.
Texas Air Corp. and its two subsidiaries, Continental and Eastern Air Lines, have assumed price leadership in the industry, making Continental's reaction particularly important. When Continental and Eastern announced new deep discount programs at the beginning of the year, other airlines quickly followed.
Although fares have increased since then, Texas Air has killed a couple of attempts to raise them further by refusing to go along when other airlines announced increases.