Airlfares will not come down even if oil prices fall

By the Editorial Team · Saturday, October 24, 2026

American Airlines announced that airfares are unlikely to decrease even if fuel prices drop, as rising jet fuel costs continue to pressure profitability, leading the airline to expect a full-year loss. This pricing strategy reflects broader industry trends where U.S. carriers are maintaining higher fares to offset expenses amid reduced competition and financial challenges for low-cost rivals.

American Airlines has indicated that airfares are unlikely to decline even if global oil prices fall, as the carrier grapples with rising fuel costs that have affected profitability. The airline, the world’s largest, expects to post a loss for the year due to elevated expenses linked to jet fuel.

Devon May, American Airlines’ chief financial officer, told reporters that ticket prices would probably remain steady despite potential decreases in fuel costs. “If fuel prices go up, we need to generate higher fares to offset that higher fuel price,” he said, though he emphasized that fares have yet to fully rebound in real terms from the pandemic-related downturn. According to May, the recent increase in ticket prices was overdue but delayed due to an industry oversupply environment in 2024. This year marked the first time in several years that airlines were able to raise yields back to levels seen seven years ago when adjusted for inflation.

The airline reported a 19 percent increase in third-quarter revenues compared to the same period last year, driven by a 23 percent rise in premium travel sales and a 28 percent increase in corporate-related revenue. Nevertheless, higher jet fuel costs led to an additional $1.9 billion in expenses during the quarter, prompting American Airlines to revise its profit forecast downward, expecting losses of between $1 and $1.60 per share for the full year.

Other major U.S. carriers have faced similar challenges. Delta Air Lines recently cut its profit outlook despite price increases. Airlines across the sector have responded to rising costs by enhancing their product offerings, including upgraded cabins, improved lounges, and premium amenities such as higher-quality wines and champagnes.

United Airlines’ chief commercial officer, Andrew Nocella, highlighted that businesses and individual travelers have largely accepted fare increases as a correction following years of prices lagging behind broader inflation. However, Nocella noted a 1.3 percent drop in leisure travel seat occupancy during the third quarter, suggesting some sensitivity to higher fares.

U.S. carriers have borne greater exposure to fluctuating fuel prices compared with European and Asian airlines, which have more extensive fuel hedging strategies in place. Going into 2027, U.S. airlines plan to reduce fuel hedges, raising concerns among industry executives that ticket prices may continue to rise. Michael O’Leary, CEO of Ryanair, predicted last month that fares could climb as much as 20 percent next summer.

Aviation economist Dan Akins of Flightpath Economics observed that leading U.S. airlines are leveraging current market conditions amid limited competition and financial strains on low-cost carriers, enabling them to maintain elevated fares with less resistance than in previous years.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.