Travelers may continue to face steep airline tickets even though jet fuel prices have recently fallen, according to major U.S. carriers and industry analysts. The price of jet fuel surged after the Iran conflict began, fell sharply in the spring, and rose again over the summer, creating a volatile market that makes it difficult for airlines to lower fares.
Fuel volatility drives pricing decisions
Brett House, an economist at Columbia Business School, explained that airlines plan routes and seat inventories months in advance, basing those decisions on expected fuel costs. “It’s not just the level of fuel costs that is a problem or a challenge for airlines,” House said. “It’s also the volatility.” Because tickets are often sold well before fuel prices settle, airlines cannot retroactively raise prices on seats already booked.
Airfare trends outpace fuel swings
The Argus U.S. Jet Fuel Index dropped from an early‑April peak of $4.88 per gallon to a low of $2.70 in June, yet average fares stayed high. The Bureau of Transportation Statistics reported that the average fare (excluding optional fees) rose from $405 in the last quarter of 2025 to $428 in the first quarter of 2026, and to $436 in the April‑June period.
Seasonal price spikes for holiday travel
Travel‑booking platform Hopper noted that a round‑trip domestic fare averaged $402 for Thanksgiving travel and $452 for Christmas, representing 31% and 23% increases over the previous year. The Labor Department also recorded that August airfares were 23% higher than a year earlier.
Airlines’ cost‑recovery strategies
United Airlines CFO Mike Leskinen said about 35% of the airline’s tickets for the final three months of the year were already booked when fuel prices rose again, preventing retroactive fare hikes. United, along with American and Southwest, is trimming less‑profitable routes to manage higher fuel expenses. United warned of further cuts in 2027 if fuel remains expensive.
American Airlines CFO Devon May estimated that each additional cent per gallon of jet fuel adds roughly $10 million to the carrier’s quarterly fuel bill, with the latest price surge expected to increase fourth‑quarter fuel costs by about $1 billion.
Industry outlook
International Air Transport Association (IATA) expects fuel to account for nearly one‑third of airline operating expenses this year, up from about a quarter in 2025. Stephen Treanor, a finance professor at California State University, Chico, warned that unless jet fuel prices stay low for an extended period, airfares are unlikely to decline significantly.
Overall, the combination of advance ticket‑selling practices, schedule adjustments, and ongoing fuel price volatility suggests that travelers may continue to pay higher fares for the foreseeable future, even if jet fuel prices eventually stabilize.
Original reporting: 2news.com — read the source article.
