Alaska Airlines Raises Fares to Help Offset Rising Fuel Costs |
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By: Alaska Airlines Posted: 2007-10-23 15:05:59 |
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In response to the skyrocketing price of jet fuel, Alaska Airlines has raised one-way fares $5 to $10.
"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." Every $1 increase in the price of a barrel of oil adds $10 million in annual fuel costs for Alaska Air 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. Fares for 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. Alaska Airlines and Horizon Air continually work to mitigate fare increases resulting from the cost of jet fuel through hedging. Currently, 50 percent of the two airlines' fourth quarter fuel consumption is hedged at $62 per barrel. Alaska Airlines and Horizon Air serve 92 cities through an expansive network throughout Alaska, the Lower 48, Hawaii, Canada and Mexico. For reservations, visit alaskaair.com. For more news and information, visit the Alaska Airlines/Horizon Air Newsroom at alaskaair.com/newsroom. |
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