Airfares have soared over the past couple of quarters, as war with Iran and conflicts in the Middle East have squeezed oil supplies. The International Air Transport Association reported that average jet fuel prices rose 1.2% last week to $192.44/bbl; the average prices had been between $80 and $100/bbl for the 18 months prior to the Iran war.
That’s led to increased airfares and fewer passengers. The TSA’s numbers show that there’s been about a 2.1% decrease in travelers from summer 2025 to summer 2026. But airlines have been focused on a 22% increase in fares and strong demand for premium cabins, which may make up for the decrease in overall passenger volume.
“We’re actively prioritizing yield versus load factor and really happy as we see it. It fits right in with the premium investments that we’re making,” said American Airlines CEO Nat Pieper on a recent earnings call.
And similarly, a recent earnings call for Southwest had CEO Bob Jordan explaining that, “Passenger fares came in about $3 above what our forecast was, and the more important thing is that passenger volumes also exceeded our expectations.”
And CNBC has reported that at the Ed Bastian, CEO of Delta Airlines, addressed the issue during the aviation industry’s annual black-tie Wings Gala in New York City.
“Today, we find ourselves yet at another inflection point for our industry and the world. ... Geopolitics affecting our business, driving the price of jet fuel to historic highs. It causes many people to question yet again the durability of our industry. But I’m not worried because I know the people in this room, and I know your resilience and how you’ve demonstrated that time and time again,” Bastian said.
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