United, Delta, Continental Raise U.S. Fares

Published August 12, 2005

| Reuters

United Airlines (UAL), Delta Air Lines Inc. (DAL), and Continental Airlines (CAL) have raised fares on most U.S. routes to try to mitigate the effect of rising fuel costs.

United, a unit of UAL Corp., said its fare increase of $2 to $5 affected each one-way leg of a trip. Delta said its increase of $10 also applied to each leg of a trip except in markets where it faced low-cost competition, where the fare would rise by $3 to $5 per leg.

Continental said Thursday it was matching Delta's fare hike. It was not immediately clear when Continental's increase would go into effect. But United and Delta said their increases were effective immediately.

The airline industry has been hurt by soaring fuel prices and low-cost competition. Crude oil futures notched a record high of $66 a barrel Thursday.

"Given current crude prices and generally consistent participation amongst legacy names, we see no reason for last night's (fare hike) initiative to fail," said J.P. Morgan analyst Jamie Baker in a research note.

Delta shares trimmed morning losses of up to 10 percent after the fare hike was announced, but were still down 11 cents or 5.7 percent in afternoon trading on the New York Stock Exchange. Continental shares were off 11 cents or less than 1 percent at $14.57 on the NYSE. UAL shares were unchanged at $1.42 on the over-the-counter bulletin board.

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