High Gas Prices Forcing Airline Industry In Crisis

As the price of oil continues to sky-rocket, it is landing the airline industry in the midst of a "full-blown crisis," according by a report published by a U.S. travel industry consumer group.

In May, American Airlines said it would begin charging customers $15 US for the first checked piece of luggage. Alongside American Airlines, United Airlines and U.S. Airways will start charging customers $15 US for the first checked bag, and many other airlines have strated charding $25 for a second checked bag.

Alongside with these new luggage charges, prices of domestic fares have increased by $10 to $60, depending on the distance passengers fly and the competition on the route. The biggest increase that will be seen will be on routes of 750 miles or more. Such airlines to increase in air-fare costs include Delta Air Lines, American Airlines. AirTran had raised their leisure ticket prices by $30, and their business-class prices by $50 roundtrip.

In other parts of the world, airlines have also accepted these new changes to counter the high fuel costs. Air Canada launched a new service in April whereby stranded passengers are charged $25 CDN for short-haul flights and $35 CDN for long-haul flights. Virgin Blue, an Australian airline, raised ticket prices by $5 AU ($4.70 US), and plans to cut costs by $50 million this year.

Job-Cuts
Due to high fuel costs, airlines have also started cutting back jobs to counter rising fuel prices. Finnair said it would cut 500 jobs, and United Airlines had said it would cut between 900 and 1,100 jobs.

Other Charges
Among other charges include a $2 charge for soda, and a processing fee will be in effect for travelers who use Dividend Miles travel awards: a fee of $25 US for domestic flights, $25 US for tickets to Mexico and the Caribbean, and $50 US for Hawaii and international flights.

The cost of buying tickets from a call-in reservation center has also increased from $15 to $25 for domestic tickets and $35 for international tickets. The cost of buying tickets at the airport will increase from $20 to $35 for domestic flights and $45 for international flights.