Why Airfares May Stay High Even if Fuel Prices Decline, According to an Airline
- U.S. carriers are increasingly flying with empty seats rather than cutting fares, betting that disciplined pricing will protect profits amid soaring fuel costs, with passenger revenue across major airlines rising nearly $8.8 billion in the third quarter.
- Jet fuel prices have surged roughly 90% since the US-Israeli war on Iran began in February, rising from $2.43 per gallon to $4.63 on October 20, forcing several carriers to cut their annual earnings forecasts.
- American Airlines CFO Devon May warned that airfares likely will remain elevated even if oil prices decline, noting the carrier must "generate higher yield" to offset rising fuel expenses after reporting deeper losses for 2026.
- Following similar moves by other carriers, JetBlue Airways initiated a $10 one-way increase in domestic fares on Wednesday, while U.S. airfares rose an average of nearly 23% year-on-year through September, outpacing the 3.6% growth in overall consumer prices.
- Major airlines plan to grow domestic capacity 3.0% in the fourth quarter and 3.8% in the first quarter of 2027, a sharp acceleration from the 0.2% growth in the third quarter that may intensify competition and complicate fare-gain sustainability.
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Fox Business
The New York LedgerAmerican Airlines says airfares could stay elevated even if fuel prices drop
American Airlines warned airfares are likely to stay elevated even if fuel prices decline, as surging fuel costs drove deeper losses and an updated earnings forecast.
Fox 10 Phoenix
Why airfares may stay high even if fuel prices decline, according to an airline
Airfares may remain elevated even if fuel prices decline, as airlines work to offset higher operating costs and recover ticket prices after years of pandemic-related disruptions.
U.S. airlines are raising fares and scaling back new flight plans as soaring jet fuel prices start to eat into profits. Travel demand remains resilient, but higher fares are not fully offsetting fuel costs. Airfares in the United States rose an average of nearly 23% year-on-year in the seven months through September, while overall consumer inflation was 3.6%. However, Delta Air Lines, Southwest Airlines and American Airlines have all lowered the…
With airfares rising sharply as aviation fuel prices surge due to the war in Iran, the airline industry predicts that ticket prices will not decrease even if oil prices fall. According to the Financial Times (FT) on the 22nd (local time), Devon May, Chief Financial Officer (CFO) of American Airlines, the world's largest airline, stated in an interview with the FT, “Even if fuel prices fall, airfare prices are generally currently
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