High airfares could stick around even if jet fuel prices fall
[September 28, 2026] By
RIO YAMAT
Travelers could be stuck paying high airfares even if oil and jet fuel
prices fall, major U.S. airlines and industry analysts say.
The price of jet fuel shot up after the Iran war began and retreated
sharply in the spring before surging again as the summer went on. Such
fluctuations make it harder for airlines to plan ahead and give them a
reason to be cautious about lowering ticket prices, according to Brett
House, an economist who teaches at Columbia Business School.
Jet fuel has risen even faster than oil during the war, reflecting both
higher crude prices and tight supplies of the refined fuel that is one
of airlines’ largest operating expenses. Carriers cut some less
profitable flights and raised fares and baggage fees, although major
U.S. airlines said higher passenger revenue initially covered only part
of their soaring fuel costs.
Airfares haven’t moved in lockstep with fuel prices, however. The Argus
U.S. Jet Fuel Index plunged from an early April peak of $4.88 a gallon
to a wartime low of $2.70 in June, but average fares remained elevated.
The average fare, not including optional fees for services such as
checked bags and seat selection, rose from $405 in the last three months
of 2025 to $428 in the first quarter of this year and to $436 in the
April-June period, according to the Bureau of Transportation Statistics.
Part of the disconnect between fuel prices and airfares comes down to
timing, House said. Airlines typically decide several months in advance
how many flights to operate and seats to offer, factoring in expected
fuel costs and other expenses. They begin selling tickets even earlier.
While prices for seats on the same flight can change repeatedly,
airlines can't charge more for seats already sold if fuel prices
suddenly spike, he explained.
“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.”
There are few signs of relief so far for travelers as airlines adjust
their schedules and prices for the remainder of the year. In August,
U.S. airfares were 23% higher than a year earlier, according to the
Labor Department. Jet fuel prices kept climbing this month, reaching
$4.53 a gallon on Sept. 17, according to the Argus index.
At $4.30 a gallon on Friday, the average price across the four U.S.
markets the index tracks remained nearly twice the 2025 average.
Travelers shopping for holiday flights already are encountering the
highest airfares in a decade, travel-booking company Hopper said in a
report published the same day.
The company, which tracks fares available in flight searches, estimated
that during the previous week, a round-trip domestic fare averaged $402
for Thanksgiving travel and $452 for Christmas, 31% and 23% more than
last year.
And the pressure on airlines and travelers isn't limited to the United
States. Globally, jet fuel averaged about $99 a barrel on Feb. 27, the
day before the war began, according to the International Air Transport
Association’s Jet Fuel Price Monitor. Prices more than doubled to $209
by early April, fell for nearly three months and reached $195 a barrel
in mid-September following their renewed ascent, IATA said, citing data
from S&P Global Energy Platts.
Fuel prices can swing overnight while airfares decline more slowly
The renewed pressure on jet fuel prices stems from many of the same
disruptions that have sent diesel prices soaring. Fighting has curtailed
refinery production and fuel exports from the Middle East, while
Ukrainian strikes have damaged Russian refineries. Because diesel and
jet fuel are closely related products that compete for refinery output,
shortages of one can put additional pressure on the price and
availability of the other.
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An aircraft lands at Philadelphia International Airport in
Philadelphia, Nov. 6, 2025. (AP Photo/Matt Rourke, File)
 IATA expects fuel to account for
nearly one-third of airline operating expenses this year, up from
about a quarter in 2025.
By the time fuel prices jumped again, about 35% of United’s tickets
for the final three months of the year were already booked and the
airline could not increase those fares retroactively, Chief
Financial Officer Mike Leskinen said. The airline expects to recover
its higher fuel costs through revenue but not immediately, he said.
Speaking about the rising price of jet fuel at a Sept. 16 investor
conference, Leskinen said, “I don’t actually care if it stays high.
I just need it to stabilize.”
The time it takes airlines to recoup their costs means travelers may
keep paying for a fuel spike even as prices come down. Jet fuel
prices need to fall and stay down for airfares to decline on a
sustained basis, said Stephen Treanor, a finance professor at
California State University, Chico, who has studied airlines’
exposure to fuel price risk.
Carriers are responding to the latest swing in fuel prices
The speed with which jet fuel prices rose recently has complicated
the forecasts of U.S. airlines. As recently as Sept. 10, JetBlue
raised its expected average fuel price for the July-September period
to $3.96 a gallon. Prices continued climbing afterward, with the
Argus U.S. Jet Fuel Index reaching $4.53 a gallon a week later and
remaining above $4.25 with just days left in the quarter.
Every penny per gallon adds about $10 million to American Airlines'
quarterly fuel bill, Chief Financial Officer Devon May said.
Speaking at the same investor conference this month, May said the
latest increases would boost the airline's fourth-quarter fuel costs
by about $1 billion.
American, United and Southwest Airlines have said they are pruning
their flight schedules further, particularly on less-profitable
routes, due to higher fuel costs. United, for example, pulled some
December flights and warned of further cuts in 2027 if fuel remains
expensive. American said it expected to grow more slowly next year
than it anticipated a few months ago.
Travelers who buy tickets at the last minute are paying a price. The
average same-day fare for a one-way domestic Allegiant Air flight
jumped 21% in a week, to $280 on Sept. 18, according to a Deutsche
Bank analysis of flight pricing. The comparable price for a same-day
American Airlines fare was $463, up 6%.
For travelers holding out for cheaper fares, the wait could outlast
the war itself.
“The likelihood that fuel surcharges are going to be rolled back and
airfares are going to be brought down is very low over the next few
months,” House said.
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Associated Press writer Lisa Leff in London contributed to this
report.
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