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Fuel cost could hike air fares

Delta CEO says airlines need a 15-20 percent increase just to break even with jet fuel costs.

WASHINGTON — Domestic airlines need to raise fares by 15 percent to 20 percent just to break even at current fuel prices, the chief executive of Delta Air Lines, which seeks to acquire Northwest Airlines, said Tuesday.

“An airline ticket has got to reflect the full cost of fuel,” Delta Air Lines Inc. CEO Richard Anderson told reporters, adding that such an increase was likely to depress demand and prompt carriers to further trim their flight schedules.

Cost-cutting measures “have largely been exhausted,” Northwest Airlines Corp. CEO Doug Steenland said.

Since Dec. 20, carriers have raised fares nine times, according to BestFares.com, and a number of airlines in recent weeks have also raised fees for checking a second bag and other amenities.

When asked if a combined Delta-Northwest would be profitable in its first year, Anderson returned to a common theme: “It will all be a product of fuel prices ... and stay tuned for earnings tomorrow and you’ll see what a dramatic effect it’s had.”

Both airlines serve the Wilkes-Barre/Scranton International Airport through regional partners.

United Airlines parent UAL Corp. on Tuesday became the third large carrier to report a first-quarter loss due largely to soaring fuel costs, following American Airlines parent AMR Corp. and Continental Airlines Inc. The cost of jet fuel in New York last Tuesday was $3.73 a gallon, compared with about $2.06 a year earlier.

United also said it is cutting flights and 1,100 jobs. Delta and Northwest report first-quarter results today, while US Airways Group Inc. reports Thursday. Southwest Airlines Co. is the only large carrier to have reported a profit.

Steenland and Anderson said they were in Washington to meet with lawmakers on the two committees holding hearings Thursday about their proposed combination, and with representatives from the states where they are based. They told reporters they are confident the Justice Department will not require them to give up any gates or slots on the few routes where they do overlap because ample competition exists in those cities.

The carriers filed paperwork with antitrust regulators on Monday, Steenland said.

Any concerns about competition on international routes were answered earlier this month when the Transportation Department granted Northwest and Delta preliminary approval to share revenue and coordinate schedules across the Atlantic, he said.

United Airlines parent UAL Corp. … became the third large carrier to report a first-quarter loss due largely to soaring fuel costs.

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