Air France, Lufthansa to Raise Fuel Surcharges in Coming Days

June 11 (Bloomberg) -- Air France-KLM Group and Deutsche Lufthansa AG, Europe's two biggest airlines, will increase fuel surcharges in coming days to counter surging kerosene costs.

The Air France brand will raise the charge on its longest intercontinental flights by 20 euros to 121 euros ($188) per flight starting June 13, the Paris-based company said in a statement today. Cologne, Germany-based Lufthansa will raise the fee on each long-haul flight by 10 euros to 92 euros on June 16.

Airlines worldwide may report combined losses of $6.1 billion this year, the worst since 2003, as spiraling fuel costs and waning economic growth wipe out earnings, the International Air Transport Association trade group said June 2. Jet-fuel prices in northwest Europe have jumped about 48 percent this year, Bloomberg data show.

``Lufthansa continually monitors oil prices and will make any future adjustments to the fuel surcharge dependent on further trends in the price of jet fuel,'' the airline said in a statement today.

Air France will increase the surcharge by 2 euros to 19 euros a flight within France, by 5 euros to 31 euros on medium- haul routes and by 10 euros to 111 euros on intercontinental flights lasting 9 hours or less. Lufthansa will raise the fee on European routes by 3 euros to 24 euros.

Air Berlin, Europe's third-biggest discount carrier, said separately today that it will increase the fuel surcharge on intercontinental flights by 10 euros to 95 euros per flight as of June 16. The fee for services within Germany and to European cities will be raised by 3 euros to 25 euros, the Berlin-based airline said.

Hedging

Lufthansa said a week ago that, while it's ``consistently'' buying hedging contracts to guard against kerosene-price increases, it expects to spend about 5.7 billion euros on jet fuel this year, 8.4 percent more than previously predicted. Bookings remain ``altogether solid'' even as Lufthansa charges passengers more, and that it will keep adding flights, the carrier said June 5.

The two German airlines and Air France, including its Dutch brand KLM, last raised surcharges in May. Today's announcements come after London-based competitor British Airways Plc, Europe's third-biggest carrier, boosted the fee by as much as 38 percent on June 3.

Air Berlin dropped 49 cents, or 7.8 percent, to 5.78 euros in German trading while Lufthansa declined 15 cents, or 1 percent, to 15.56 euros. Air France fell 43 cents, or 2.6 percent, to 15.91 euros in Paris.

To contact the reporter on this story: Jann Bettinga in Frankfurt at jbettinga@bloomberg.net.

To contact the editor responsible for this story: Christopher Jasper at cjasper@bloomberg.net.