High airfares could stick around even if jet fuel prices fall

Airfares could remain high even if jet fuel prices drop, U.S. airlines and industry analysts say. Brett House, an economist at Columbia Business School, links the problem to volatility: jet fuel jumped when the Iran war began, fell sharply in spring, then surged again through summer. Because airlines decide capacity months ahead and sell tickets even earlier, they can’t automatically raise prices already locked into existing sales if fuel suddenly spikes. Jet fuel also rose faster than oil, reflecting higher crude prices and tight supplies of the refined fuel, one of airlines’ largest operating costs. Even with the Argus U.S. Jet Fuel Index dropping from $4.88 per gallon in early April to $2.70 in June, average fares stayed elevated—rising from $405 in the last three months of 2025 to $428 in Q1 2026 and $436 in April–June. In August, U.S. fares were 23% higher than a year earlier. Hopper estimated Thanksgiving round trips at $402 and Christmas at $452, up 31% and 23% year over year.