Why airfare is suddenly so much more expensive than expected

By August, U.S. airfares jumped 23.4% year over year, reversing earlier expectations that travel would get cheaper heading into 2026. The increase is tied to a “perfect storm” of reduced competition, airline product changes, and rising operating costs. One trigger was the effective exit of Spirit Airlines, after the Justice Department blocked its merger with JetBlue—removing a major low-fare pressure point. With Frontier, and smaller carriers like Allegiant, Breeze and Avelo, pricing power shifted. Airlines are also expanding premium cabins, with American Airlines moving premium seats on single-aisle aircraft from about 25% to 40%. Finally, fuel costs are climbing, with IATA estimating jet fuel at $152 per barrel in 2026 versus $90 in 2025.