Alaska Airlines Raises Fares to Help Offset Rising Fuel Costs

In response to the rising price of jet fuel, Alaska Airlines has raised one-way fares $5 to $10 in hopes of offsetting the added costs. Alaska Airlines claims every $1 increase in the price of a barrel of oil adds $10 million in annual fuel costs for the group before the benefit of fuel hedges. Oil prices have jumped $10 a barrel during the past two weeks alone, which would add $100 million to the company’s annual fuel bill if prices remain at current levels.

“With the price of a barrel of crude oil spiking more than 50 percent since this time last year, jet fuel is now our largest single expense, accounting for more than 30 percent of our overall operating costs,” said Bill Ayer, chairman and chief executive officer of Alaska Air Group, the parent company of Alaska Airlines and Horizon Air. “Like other businesses, we need to offset at least some of our increased costs.”

Fares on the longer flights in the United States and to Canada and Mexico rose $10 each way. Shorter flights along the West Coast, within most of the state of Alaska, and between Southeast Alaska and the Lower 48 went up $5 each way.

NetNewsPublisher