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Weather: Mostly Cloudy, 66° F




Best Fares: Tickets, fuel head up

09:21 PM CDT on Monday, April 28, 2008

If you have been shopping for fares recently, you've probably noticed that prices have been heading up.

In noncompetitive markets in the last four months, airlines have increased domestic fares nine times and have raised the fuel surcharge four times. Coast-to-coast fares have risen $190 this year if you count both fare hikes and fuel surcharges.

The fuel surcharge has become a popular way to raise fares, because the airlines stand to make more money. Many major carriers have contracts with corporations whereby they rebate a percentage of the base fare to these companies because the companies give airlines so much business. Airlines do not have to give companies rebates when they raise fuel surcharges, because the charges are not part of the base fare.

Although many other markets have seen a great increase in the cost of travel over the last three years, things are not as bad by comparison in Dallas, because the lifting of the Wright Amendment restrictions increased competition.

In January 2005, walk-up business fares across the country were reduced and capped at $490 one-way; now, on many routes, those walk-up fares are more than $1,000. If you look at the Dallas market, and you include the Business Select fares on Southwest, business fares have increased by $190 round trip since January 2005. In noncompetitive markets, the legacy carriers have raised prices by as much as $190 in just four months.

Southwest has fuel-efficient 737s and doesn't charge a fuel surcharge. American has to burn 40 percent more fuel with its jets. On coast-to-coast flights, if you break down the cost of Southwest's airfares, consumers pay four or five cents a mile. On shorter flights such as Dallas to Houston, Oklahoma City or St. Louis, passengers pay 50 to 60 cents per mile, which is still low compared to other airlines.

Domestic fuel surcharges don't look so bad when you compare them to international markets. From Dallas on Lufthansa, for example, the round-trip fuel surcharge is $270 to Asia, $290 to deep South America and $340 to Cairo and Johannesburg. The surcharge can vary by airline, so make sure you are looking at the price, including all taxes and fees, before you buy.

Tom Parsons is publisher of Bestfares.com.