US airfares were 23% higher in August than a year earlier, according to the Labor Department, and jet fuel was $4.30 a gallon on the Friday before the Associated Press reported on 28 September, nearly twice the 2025 average. The average fare, excluding optional fees, rose from $405 in late 2025 to $436 in April to June 2026, according to the Bureau of Transportation Statistics. The figures were published a month ago, so the current picture may be different. The question is whether fares will fall when fuel prices ease.
The case that fares will stay high begins with the cost base. According to the International Air Transport Association, global jet fuel averaged about $99 a barrel on 27 February, the day before the war began, more than doubled to $209 by early April and was $195 in mid-September. Fuel is expected to account for nearly one-third of airline operating expenses in 2026, up from about a quarter in 2025. American Airlines chief financial officer Devon May said each penny per gallon adds about $10 million to the airline’s quarterly fuel bill, and recent increases would add about $1 billion to fourth-quarter costs. Hopper estimated round-trip domestic fares averaged $402 for Thanksgiving, 31% above last year, and $452 for Christmas, 23% above, and American, United and Southwest are pruning schedules on less profitable routes. JetBlue raised its expected average July to September fuel price to $3.96 a gallon on 10 September, and a Deutsche Bank analysis found a same-day American fare of $463, up 6%.
The case that relief is possible rests on how volatile fuel has been. The Argus US Jet Fuel Index peaked at $4.88 a gallon in early April, fell to a low of $2.70 in June, and rose again to $4.53 on 17 September, so prices have fallen sharply before. United chief financial officer Mike Leskinen said about 35% of tickets for the final three months were already booked when fuel prices rose again, and added, “I don’t actually care if it stays high. I just need it to stabilize.” Brett House, an economist at Columbia Business School, said airlines are cautious about cutting fares because of the volatility: “It’s also the volatility.” Stephen Treanor, a finance professor at California State University, Chico, said fares are unlikely to fall on a sustained basis unless jet fuel prices fall and stay down.
For travellers, the question is whether fuel stabilises before the holiday season. United pulled some December flights and warned of further cuts in 2027 if fuel stays expensive, and American expects slower growth next year than it anticipated a few months ago. Brent crude has since risen to $116.72, its highest since June 2022, which suggests that airlines’ costs are still under pressure. The index’s swing from $4.88 in April to $2.70 in June and back above $4 by September shows how quickly the cost base can change.
Airlines have raised fares and trimmed schedules, and they say prices will not fall until fuel prices are stable. That is not yet the case.
