Jet fuel prices drop, but airlines stick to high fares as summer travel holds strong

Jet fuel prices have fallen, but airlines are keeping summer fares high as Canadian travel demand remains strong. Kayak data shows that, as of late June, domestic economy airfares were 11% higher than a year earlier, while international fares were roughly flat year-over-year. Despite lower fuel costs, major North American carriers said demand has stayed resilient entering peak season, even amid global conflict and fewer Canadians traveling to the U.S. Air Canada chief commercial officer Mark Galardo reported remaining “in the green” over two months despite multiple fare increases. The International Air Transport Association also cited resilience, with demand holding despite energy and transport shocks linked to the Iran war. A Rakuten survey found 42% of Canadians are cutting back spending elsewhere to afford pricier flights. IATA data indicated jet fuel was 24% below levels from a month earlier but still 30% above late June 2024.