Major U.S. airlines and industry analysts say travelers may be forced to pay higher airfares even as oil and jet fuel prices fall.
Jet fuel prices soared after the Iran war began, fell sharply in the spring, then spiked again as the summer wore on. The volatility makes it harder for airlines to plan ahead and gives them reason to be cautious about lowering airfares, said economist Brett House, who teaches at Columbia Business School.
During the war, jet fuel rose even faster than oil, reflecting rising crude prices and tight supplies of refined fuel, one of airlines’ largest operating expenses. Airlines have cut some less profitable flights and raised fares and baggage fees, although major U.S. carriers say rising passenger revenue will initially only offset some of soaring fuel costs.
However, airfares have not moved in tandem with fuel prices. The Argus U.S. jet fuel index plummeted from a peak of $4.88 a gallon in early April to a wartime low of $2.70 a gallon in June, but average airfares remained higher.
The average fare, excluding 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 between April and June, according to the Bureau of Transportation Statistics.
House said part of the disconnect between fuel prices and ticket prices comes down to timing. Airlines typically decide how many flights to operate and how many seats to offer months in advance, taking into account expected fuel costs and other expenses. They started selling tickets earlier. He explained that while seat prices may change over and over again on the same flight, airlines cannot charge more for seats that have already been sold if there is a sudden spike in fuel prices.
“For airlines, it’s not just a question or challenge of fuel cost levels,” House said. “That’s also the reason for the volatility.”
So far, travelers are seeing no signs of relief as airlines adjust flight schedules and prices for the rest of the year. According to the Labor Department, U.S. air ticket prices rose 23% in August compared with the same period last year. Jet fuel prices continued to climb this month, reaching $4.53 per gallon on September 17, according to the Argus Index.
On Friday, the average price in the four U.S. markets tracked by the index was $4.30 a gallon, still nearly double the 2025 average price. Travel booking company Hopper said in a report released on the same day that travelers purchasing holiday flights have encountered the highest air ticket prices in a decade.
The company, which tracks fares in flight searches, estimated last week’s average domestic round-trip Thanksgiving fare at $402 and Christmas Day round-trip domestic fare at $452, up 31% and 23% respectively from last year.
The pressure on airlines and travelers is not limited to the United States. According to the International Air Transport Association’s Jet Fuel Price Monitor, the global average price of jet fuel on February 27, the day before the war began, was about $99 per barrel. Oil prices more than doubled to $209 a barrel by early April, then fell for nearly three months before rising again to reach $195 a barrel in mid-September, IATA said, citing data from S&P Global Energy Platts.
Fuel prices can fluctuate overnight, while airfares will fall more slowly
The new pressure on jet fuel prices stems from many of the same disruptions that caused diesel prices to soar. The fighting has reduced refinery production and fuel exports from the Middle East, while strikes in Ukraine have hurt Russian refineries. Because diesel and jet fuel are closely related products that compete for refinery output, a shortage of one product could put additional pressure on the price and supply of the other.
IATA expects fuel to account for nearly a third of airline operating expenses this year, up from about a quarter in 2025.
Chief Financial Officer Mike Leskinen said that when fuel prices rose again, about 35% of United’s tickets were booked in the final three months of the year and the airline could not retroactively raise those fares. He said the airline expected to offset higher fuel costs through revenue, but there would be no immediate recovery.
Speaking about rising jet fuel prices 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 for airlines to recoup costs means travelers are likely to continue paying rising fuel costs even as prices fall. Stephen Treanor, a finance professor at California State University, Chico who has studied the fuel price risks faced by airlines, said jet fuel prices would need to continue falling for airfares to continue falling.
Carriers are grappling with latest fluctuations in fuel prices
The pace at which jet fuel prices have risen recently complicates forecasts for U.S. airlines. As recently as September 10, JetBlue raised its expected average fuel price from July to September to $3.96 per gallon. Prices have continued to climb since then, with the Argus US Jet Fuel Index reaching $4.53 a gallon a week later and remaining above $4.25 with just a few days remaining in the quarter.
Devon May, American’s chief financial officer, said every penny spent per gallon adds about $10 million to quarterly fuel bills. At the same investor conference this month, May said the latest hike would increase the airline’s fourth-quarter fuel costs by about $1 billion.
American Airlines, United Airlines and Southwest Airlines have all said they are further cutting flight schedules due to rising fuel costs, especially on less profitable routes. United Airlines, for example, canceled some flights in December and warned it would cut flights further in 2027 if fuel prices remain expensive. American Airlines said it expects growth next year to be slower than expected just a few months ago.
Travelers who buy tickets at the last minute are paying the price. On September 18, the average same-day fare for a domestic one-way flight on Allegiant Air rose 21% in a week to $280, according to an analysis of flight pricing by Deutsche Bank. The comparable same-day fare on American Airlines was $463, up 6%.
For travelers who insist on buying cheaper tickets, the wait may be longer than the war itself.
“The likelihood of lower fuel surcharges and lower airfares in the coming months is very low,” House said.
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Associated Press writer Lisa Leff in London contributed to this report.