Airlines struggle as fuel costs outpace sharp fare increases

U.S. airlines are cutting profit forecasts and weighing additional capacity reductions as jet-fuel costs surge faster than ticket prices. While average U.S. airfares rose nearly 23% year on year in the seven months through September, several carriers say higher fares aren’t fully covering fuel. Delta, Southwest and American have lowered their 2026 earnings guidance. Industry expectations for jet fuel now run between US$4.25 and $4.85 a gallon, up from below $4 in the third quarter. United expects fourth-quarter profit below Wall Street estimates, recovering only 72% of extra fuel costs through revenue gains. Record third-quarter revenue hasn’t eased margin strain. The market also faces uncertainty as the Iran conflict enters its eighth month, limiting how much airlines can pass on to passengers.