MILES O'BRIEN, CNN ANCHOR: As rising gas prices send commuters digging deep into their pockets, the effects of those spiralling prices are spreading. Automakers are tacking on higher delivery frees, shippers are boosting rates, and now airlines are raising ticket prices. We get more on all this from CNNfn reporter Bob Beard.</s>BOB BEARD, CNN CORRESPONDENT (voice-over): Cost-conscious fliers are getting an unwelcome whallop in the pocketbook because of sky-high oil prices. Continental Airlines hiked airfares by up to $40 round trip depending on the length of the flight, and Northwest matched the increase, but not across the board. The latest increases on top of a $20 fuel surcharge on domestic round-trip tickets.</s>DAVID FUSCUS, AIR TRANSPORT ASSOCIATION: As jet fuel prices keep going higher and higher, the airlines can really eat less and less of that. They're forced to pass a law.</s>BEARD: Jet fuel prices, currently at 85 cents a gallon, have almost doubled from 45 cents a year ago. Some calculate that costs the industry an extra $8 billion.</s>DONALD CARTY, CEO, AMERICAN AIRLINES: It is a fundamental economic reality that the airlines can't afford, at their current levels, to absorb $8 billion of cost increase.</s>BEARD: So far this year, the average airline stock is down 20 percent, and some analysts predict some carriers will lose money this quarter for the first time in six years.</s>JAMES M. HIGGINS, DONALDSON LUFKIN JENRETTE: If fuel prices stay high, airline earnings estimates come down, that's rarely a prescription for strong stock prices.</s>BEARD: Continental's already warned it may post a first-quarter loss due to fuel costs. For now, United, American and Delta hedged their fuel costs by locking in contracts that average 30 percent below spot prices. (on camera): Travel experts say Northwest's decision to match Continental's airfare hikes on some flights now increases the chances others airlines will follow suit. Bob Beard, CNN Financial News, Washington.
High Fuel Prices Force Airlines to Raise Fares