Volatile fuel cost sees airfares soar | Arkansas Democrat Gazette

Airfares in the U.S. may stay high even if oil and jet fuel prices fall, major airlines and industry analysts say, citing how quickly costs can swing. Jet fuel spiked after the Iran war began, dropped sharply in spring, then surged again over summer, driven by both higher crude prices and tight supplies of refined fuel—one of airlines’ biggest expenses. Airlines have adjusted by cutting some less profitable flights and raising fares and baggage fees, though higher passenger revenue initially covered only part of the increased fuel bills. Despite fuel index declines—Argus U.S. Jet Fuel Index falling from $4.88 in April to $2.70 in June—average fares stayed elevated. Hopper estimates recent holiday round-trip domestic fares averaged $402 for Thanksgiving and $452 for Christmas, up 31% and 23% year over year.