Delta adds $3 surcharge on fares between U.S. and Europe
By Kyle Peterson
(Reuters) - Delta Air Lines said on Tuesday it has added a $3 surcharge each way on fares purchased in the United States for flights between the United States and Europe, a move that would help offset the cost of the EU's new Emissions Trading Scheme.
Delta is the first major U.S. airline to raise the price of U.S.-to-Europe flights since the European Union's carbon law kicked in on Sunday. Europe's highest court last month backed the controversial EU law to charge airlines for carbon emissions on flights to and from Europe.
A spokesman for Delta, the second-largest U.S. carrier, said the surcharge was added on January 2, but he declined to say whether its purpose was to shift the burden of the EU requirements to its customers.
It remains to be seen whether other carriers will match the Delta surcharge. Unmatched surcharges and fare increases can fail if rivals do not launch similar price increases.
"When airlines raise prices they're testing two things: the appetite of their competition and the appetite of consumers," said Rick Seaney, chief executive of Farecompare.com, which tracks air fares. "If either one of these two balk, they typically have to roll back those increases."
Airline experts have said U.S. carriers must add the cost to ticket prices or risk eroding their margins on trans-Atlantic flights.
Some industry watchers predict airfares between the United States and Europe could rise $50 to $90 as airlines attempt to pass along the expense.
Seaney said he was not aware of other carriers that have matched the Delta surcharge. Antitrust laws prevent U.S. airlines from publicly discussing their future pricing. Continued...