Are flight fare increases upcoming?

Fuel prices are rising and competition is fierce, leaving airlines in "classic conundrum."

Think you're paying a lot more to fill up your car? That's nothing. Think of the airlines, where the cost of gassing up just one Boeing 737 is about $13,000. That's up from only $9,000 about a year ago.

And as far as most any expert can tell, the cost of jet fuel -- and thus your airline ticket -- is going to continue to rise, too.

As the airlines approach their slowest period of the year -- the fall, when vacation travel has ended and college students are back in school -- they face a choice: Do they lower fares to stimulate travel between Labor Day and the busy holiday season, or will they have to maintain fares at their current levels, or even raise them, to cover spiraling fuel costs?

"That is the classic conundrum,'' Jenny Dervin, a spokeswoman for JetBlue Airways Corp., the low-cost carrier, said Monday. "You can't overprice the market. You have to be sensitive to what people can and are willing to pay.''

What's more, she noted, "The competition in this industry is fierce. Everyone is going to be watching what the market is doing. We at JetBlue are looking at it very closely.''

But cost pressures are equally fierce. Jet fuel in most cases has risen a stunning 58 percent so far this year -- and fuel is an airline's second-largest cost, after labor.

Late last week, JetBlue and American Airlines each raised fares $5 each way in various markets. Their fare increases followed hikes by most of the other major carriers earlier last week. Southwest Airlines followed Monday, raising prices by up to $4. Each of the airlines blamed higher costs of jet fuel, which is now about $1.90 a gallon, up from about $1.30 a gallon this time last year.

Right now, planes are flying near full, yet the airlines struggle for profitability, with two -- United Airlines and USAirways -- in bankruptcy, and speculation that Delta Air Lines is to follow them into Chapter 11. Come the day after Labor Day, planes may not be half as full. What happens to fares then is, well, up in the air.

Airlines would, of course, like to raise them. "We think fares are uneconomically low,'' said Ned Raynolds, a spokesman for American, the largest carrier. "Airline fares are about the best bargain around these days.''

But can fares be raised during the slow September-November period, when something to attract fliers would seem necessary?

Air fares will drop after Labor Day "but not as excitingly as they have in the past'' because of fuel costs, said Allan Tamm, president of consulting firm Avicor Aviation Inc. in Lake Oswego, Ore.

Experts think airlines will be forced to offer some fare sales throughout the period. Airlines also may reduce the number of planes they use in busier seasons and drop some routes to southern vacation spots.

Some airlines are already finding they can't make fare hikes stick. Monday, Northwest rolled back last week's $10 hike on some routes, citing price competition.