=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2004/05/24/f= inancial1447EDT0154.DTL --------------------------------------------------------------------- Monday, May 24, 2004 (AP) Continental Airlines rescinds fare increase (05-24) 14:15 PDT (AP) -- NEW YORK (Dow Jones/AP) -- Continental Airlines Inc. on Monday again rescinded a fare hike, after trying more than a dozen times to boost overall fares. Earlier this month, the Houston airline raised fares worldwide by $10 or $20 one-way, depending on the length of the flights. The airline said at the time it is suffering because of high fuel costs, but intense airline competition has left the carriers unable to pass along fuel costs to customers. "If we are not successful in passing along these exorbitant fuel costs through higher fares, we will ultimately be forced to seek significant wage and benefit concessions and furloughs ... in order to survive," chief Executive Gordon Bethune said in a statement earlier this month. Low-cost carrier Southwest Airlines Co. last week added a nearly network-wide fare hike for the first time since November 2000. Brandy King, a spokeswoman for Southwest, said the Dallas carrier boosted fares by $1 each way on 90 percent of its routes. Southwest has declined in the past few months to go along with any of the dozens of fare hikes attempted by other carriers. Continental's fare hike attempt had followed a familiar drill. Nearly every week for the past few months, one airline or another has attempted to hike fares. Some airlines go along with the hike, but a few -- including Southwest -- have resisted, causing most of the fare hikes to fail. An industry source said the most recent fare hike was resisted by some low-cost carriers, making the lowest fares immune to the hike. The inability of the airlines to pass along fuel costs to passengers is putting the squeeze on the major carriers. Last week, UAL Corp. Chief Executive Glenn Tilton said his airline, which continues to restructure under bankruptcy protection, would be profitable this quarter if not for the high fuel prices. Earlier this month, oil prices rose above $40 a barrel. A few airlines, such as Southwest and JetBlue Airways Corp. have contracts, called hedges, that keep their cost of most of the fuel steady and low. But other airlines, like Continental, waited too long to hedge their fuel supply, hoping fuel prices would drop. Southwest spokeswoman King said the airline is paying full price for a portion of its fuel, which was part of the reason the airline hiked fares. Southwest shares were closed Monday up 4 cents at $15.27 while Continent= al fares ended down 5 cents at $10.25 on the New York Stock Exchange. ---------------------------------------------------------------------- Copyright 2004 AP