Airfares are expected to remain high despite recent fluctuations in jet fuel prices, according to major U.S. airlines and industry analysts. Since the outbreak of conflict involving Iran earlier this year, jet fuel costs have experienced marked volatility, complicating airlines’ ability to adjust ticket prices downward.
Jet fuel prices surged following the onset of the war, then dropped sharply in the spring before climbing again through the summer months. This erratic pricing has made airlines cautious about reducing fares, given that fuel is one of their largest operating expenses. Brett House, an economist at Columbia Business School, noted that volatility as much as the fuel price level itself poses a significant challenge for carriers.
Even as jet fuel costs declined from a peak of $4.88 per gallon in early April to $2.70 in June, average airfares did not follow suit. Data from the Bureau of Transportation Statistics shows that the average fare, excluding optional fees, increased from $405 in late 2025 to $428 in the first quarter of 2026, and further to $436 in the second quarter. Airlines typically set flight schedules and prices months ahead, basing decisions on expected fuel and other costs. Since tickets on the same flight can only be sold at one price at a time, sudden fuel price drops do not immediately translate to lower fares for already sold seats.
The Labor Department reported in August that airfares in the United States were 23 percent higher compared to the previous year. By mid-September, jet fuel prices reached $4.53 per gallon, nearly double the average seen in 2025. Travel booking firms such as Hopper noted that holiday travel fares are at their highest level in a decade, with average round-trip domestic fares reaching $402 for Thanksgiving and $452 for Christmas—up 31 and 23 percent respectively from last year.
The issue of rising fuel costs and high airfares is global. The International Air Transport Association (IATA) reported that jet fuel prices averaged around $99 per barrel before the war began in late February, doubled to $209 by early April, and remained elevated near $195 in mid-September.
Several factors have contributed to sustained high jet fuel prices, including disruptions to refinery output and exports in the Middle East due to conflict, as well as damage to Russian refineries from Ukrainian strikes. Since diesel and jet fuel are closely linked refinery products, shortages or price hikes in one often affect the other. IATA forecasts that fuel will account for nearly one-third of airline operating expenses in 2026, up from about one-quarter in 2025.
As airlines continue to adjust schedules and ticket pricing amid ongoing fuel cost uncertainty, travelers should anticipate elevated airfares through the remainder of the year.