by Mia Taylor
Last updated: 3:05 PM ET, Tue August 4, 2026
With their sights set on recouping billions of dollars in increased fuel costs related to the American attack on Iran and facing higher costs of labor, maintenance and operations, airline industry leaders say it’s unlikely airfare prices will come down anytime soon.
In fact, some airline industry leaders say airfare prices are likely to stay high even if fuel prices finally drop.
“Labor costs have escalated dramatically. Maintenance is off the charts in terms of escalation. And those are all costs that every single airline pays the same,” United CEO Scott Kirby said during a recent earnings call.
Those realities, combined with the fact that consumer demand for airline tickets has not been impacted at all by steeper prices, have airline leaders saying they expect to hold on to pricing power at least through the end of 2026, if not longer, CNBC reported.
United has reported that it will pay about $6 billion more for fuel this year than it had planned for. Similarly, American Airlines has projected the same. That’s a jump in cost of more than 50% compared to 2025, and the costs are being passed on to the consumer in the form of higher fares.
Fuel prices were driven up by the U.S.-Israel strikes on Iran, which resulted in the closure of the Strait of Hormuz, one of the planet’s main shipping channels.
Jet fuel is an airline's second-highest cost after payroll. And the steep uptick in jet fuel costs came as a surprise to airlines this year. In response, airlines reduced their flight schedules, which in turn means fewer flights from travelers to choose from and increased fares.
But at least for now, those prices do not seem to be dampening consumer enthusiasm for travel.
“We observed minimal to no negative impact on demand from higher price points, a trend we see continuing,” United Chief Commercial Officer Andrew Nocella told Wall Street analysts during a July earnings call.
The real test of consumer appetite, however, may arrive when the busy summer travel season comes to an end.
For the latest travel news, updates and deals, subscribe to the daily TravelPulse newsletter.
Topics From This Article to Explore
