Carriers could soon meet market resistance

Airline fare increases are hardly news any more – there have been 10 of them so far this year – but just for the record, United Delta and American last week tacked another $20 fuel surcharge on their tickets – the second boost in little over a week. And there appeared to be no end in sight, as the price of a barrel of crude oil had climbed as high as $126 by the end of last week. In spite of the fare hikes and fuel surcharges, some industry watchers are predicting they will not be enough to stem the tide of red ink for major airlines in the face of ever-higher fuel costs. And some observers predict that fares are starting too reach levels where they will meet serious resistance in the market—i.e., people will just stop flying as much. They also note that fare increases tend to be higher on routes with the least competition, as the presence of multiple carriers in a market – especially low-cost airlines – tends to prevent big fare hikes from sticking.