United Airlines, the second largest U.S. carrier, increased almost all domestic airfares by 3-5%, due to surging fuel costs, The Associated Press reported Friday.

It was the third increase in the past two weeks, The AP reported, for United (NYSE: UAUA), which like the U.S.'s other major carriers, is struggling to maintain a viable business model amid the largest increase in aviation fuel costs since the world's second oil shock in 1979-80.

Shares of United fell 82 cents to $14.58 on the news in Friday afternoon trading.

United's latest fare hike takes place just two days after Delta Air Lines (NYSE: DAL) CEO Richard Anderson said domestic carriers will need to raise tickets 15-20% just to break even at existing fuel prices, The AP reported.

Surging fuel costs

Independent stock analyst C. Leonard Bauer, formerly of Prudential, said cost factors affecting aviation will create a stark travel choice for business and leisure travelers, at least for the immediate future, including this summer: if you're flying a few months from now, there's an 80-90% chance you'll pay considerably more, he said.

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"Two factors have to drive fares higher, short-term: fuel costs and mergers," Bauer said. "Aviation fuel costs have more than doubled in the past two years. Fuel used to be major carriers' second biggest operating expense, after labor. Now it's the biggest. Also, the Delta /Northwest merger and other mergers will mean they'll be fewer planes in the air. Fewer planes and fewer seats means higher prices, no question." Bauer added that he does not have a rating on nor own shares in any airline.

Bauer said selected discounting and the ubiquitous frequent flier miles will still occur, "but the near-term outlook is one of higher domestic prices to recover costs," adding that he expects the fare-increase cycle to last "about two years." Then, as the new, larger, merged airlines seek to lure more passengers to international destinations, fares are likely to drop about 10-20%, as the new megacarriers compete in both hemispheres for international travelers, he said.