Despite soaring jet fuel prices, air fares aren’t up that much. But they will be

By Chris Isidore, Alexandra Skores, CNN

(CNN) — Gas prices are grabbing the headlines, but jet fuel prices have doubled in the last two months. So far, air fares are only up modestly.

But that could change in the next couple of months.

“We are seeing prices for summer increasing as a result of higher fuel prices,” said Hayley Berg, lead economist at air travel booking site Hopper. “For domestic trips, the higher fuel costs have pushed trips for summer up by about 10%.”

Higher fares aren’t the only way flying is about to become more expensive. Travelers can expect fewer cheap flights and more fees as airlines try to offset a massive increase in the cost of doing business.

Still, airlines can’t simply raise fares to offset increased costs like fuel. Fares primarily are based upon demand for air travel and the supply of seats.

“The more they increase air fares, the less travelers are going to fly. Or they’ll drive,” said Zach Griff, author of an airline newsletter, From the Tray Table.

Jet fuel is a huge expense for airlines, representing about 20% to 30% of their overall costs, second only to labor, according to airlines’ financial reports.

Delta Air Lines said fuel cost $400 million more in March compared to a year ago. United Airlines CEO Scott Kirby also told employees in March that if fuel prices remain at the current level, it will cost the company an extra $11 billion dollars this year.

“For perspective, in United’s best year ever, we made less than $5 billion,” he added.

United would have to raise fares by 20% to cover the entire increase in fuel prices, he told Bloomberg, but that would reduce demand.

So airlines are finding other ways to pass the cost onto consumers.

United raised its its baggage fees on Friday. “For tickets purchased on or after April 3, 2026, fees will go up by $10 for your first and second checked bag and by $50 for your third checked bag in most markets,” the airline noted online.

And JetBlue also announced a $10 increase in most baggage fees due to “rising operating costs.” Other airlines are likely to follow suit, Griff said.

“While we recognize that fee increases are never ideal, we take careful consideration to ensure these changes are implemented only when necessary,” JetBlue said in a statement this week.

Airlines can also save money by cutting less profitable flights, which can drive up costs for passengers, too.

United said it would cut about 5% of its flight capacity over the next six months, which includes its key summer travel season. Other airlines are also quietly cutting their schedules, Griff said.

United’s Kirby told employees the reduction is in preparation for crude oil to stay above $100 a barrel through the end of 2027, going as high as a record $175. So, it’s dropping flights with lower fares used by bargain hunting-flyers, such as overnight “redeyes” and flights on Tuesdays, Wednesdays and Saturdays.

“The leisure traveler has a lot to lose from these capacity reductions, not only in less choice, but also in higher fares,” Griff said.

Still, demand for air travel remains strong. That means airlines could have the pricing power needed to raise fares even higher.

Over the past month, several airlines told investors they were seeing record bookings. The recent spike in gasoline prices could be feeding demand. The average gas price breached $4 this week for the first time since 2022. For some Americans, driving long distances could be more expensive than flying.

“We’re well positioned to be able to… do our best to recapturing that fuel spike,” said Delta Air Lines CEO Ed Bastian told investors last month, noting that five of its best sales days ever took place after the start of the war in Iran.

He said some airlines have already increased prices, but history shows it takes two or three months to fully implement fare increases sparked by spikes in jet fuel costs.

However, if the price of gasoline continues to surge, that could hurt all travel demand and keep airlines from being able to boost fares.

“If our forecast of fuel prices is correct, then my guess is there’s going to be an impact to the economy as well,” United’s Kirby told Bloomberg.

Even if the war ends soon and oil and jet fuel prices start to drop, it won’t necessarily mean fares will go back down, Griff said. There could be even stronger demand for travel, which will push fares higher.

“That’s thing about fares that people sometimes forget,” he said. “Once they’re raised, it’s not like they get lower just as quickly.”

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