Fuel costs make United's tickets more expensive

NEW YORK - United Airlines said yesterday that it had boosted ticket prices for the second time in a week, adding to its bet that customers will absorb an unrelenting rise in fuel costs.

Fuel-cost increases also pushed American Airlines' parent to a first-quarter loss despite higher revenue.

United's move could pressure other carriers to follow suit. But, it also risks driving customers away as they are growing fed up with air travel and coping with financial stresses of their own.

"There has to be a price point where the consumer says, 'OK, kids, we're staying home,' " said Terry Trippler of tripplertravel.com.

Since the start of the year, airlines have tried to raise ticket prices 12 times across most of their route networks, according to airfare research Web site FareCompare.com. Four of the increases immediately failed to stick after competitors refused to follow, and others at least partly unraveled.

United, the second-largest U.S. carrier, said it was technically raising its fuel surcharge, not the base fare customers typically see in ads.

Last week, the carrier raised round-trip fares $4 to $30, citing record fuel costs.

Travelers on some flights who were paying a surcharge of $50 round-trip will now see that charge increase to $70, spokeswoman Robin Urbanski said.

Fliers in markets where United previously did not apply a surcharge - mostly where the carrier competes head-to-head with low-cost carriers - will now be charged an extra $10 round-trip.

High fuel costs offset an increase in revenue and pushed the parent of American Airlines, the nation's biggest carrier, to a $328 million loss in the first quarter.

The results from AMR Corp., the first major U.S. airline company to report January-to-March results, could portend a difficult year ahead for the industry.

AMR said the loss equaled $1.32 a share, compared with a profit of $81 million, or 30 cents a share, in the same period a year earlier.

Revenue rose 5 percent to $5.7 billion from $5.4 billion a year earlier, but it was a bit short of the $5.73 billion forecast by analysts.

AMR also said yesterday that it would sell 90 percent of its investment arm, American Beacon Advisors Inc., for about $480 million to two private-equity firms - Lighthouse Holdings Inc., an affiliate of Pharos Capital Group L.L.C., and TPG Capital, the buyout unit of the former Texas Pacific Group.