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Thursday May 15, 2008
Reuters
Delta Increases Fuel Surcharge USD$5

Delta Air Lines said on Thursday it has increased its fuel surcharge on flights within the United States by USD$5 each way.

A spokeswoman for Delta said the surcharge was added because the price of fuel continues to outpace fares.

The increase reflects the pain that airlines are feeling as jet fuel prices, which rise with the price of oil, rise to record levels, and the US economy weakens. A barrel of crude was trading around USD$107 on Thursday.

Delta's move is the 10th attempted fare increase by major US airlines this year, six of which have stuck, according to Rick Seaney, chief executive of air fare researcher FareCompare. Fare increases last only if the they are broadly matched by rivals.

The spike in fuel prices and a weakening US economy have stalled the airline industry's modest recovery from the 2001-2006 downturn.

Big airlines are beginning to shrink to cope with much tougher operating conditions. On March 18, Delta unveiled plans to cut 2,000 jobs and scale back flights, leading the efforts by US carriers to cut costs.

Delta, which has been unable to seal a merger with rival Northwest Airlines, will offer voluntary retirement and buyout packages to 30,000 employees.

(Reuters)

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