Airlines May Keep Fares High Despite Falling Fuel Costs

WHO:

Fox Business - American Airlines Chief Financial Officer Devon May said fares could remain elevated even if fuel prices fall.

NBC News - Executives at Delta Air Lines, United Airlines, American Airlines, Southwest Airlines and Alaska Air Group said they were prioritizing margins over passenger volume.

NBC News - Southwest CEO Bob Jordan said higher fares were not eroding passenger volumes; United commercial chief Andrew Nocella described lower leisure occupancy as “a trade we would make every day.”

WHAT:

Fox Business - American reported a 19% year-over-year rise in third-quarter revenue, the highest in company history excluding the years following the pandemic.

Fox Business - American’s third-quarter fuel expenses rose 67.5% year over year, adding $1.9 billion in costs at an average fuel price of $3.85 per gallon.

Fox Business - American forecast an adjusted full-year loss of $1 to $1.60 per share, revising its earlier forecast of a loss of 65 cents to a profit of 65 cents per share.

Fox Business - American expected fourth-quarter fuel to average about $4.70 per gallon, nearly double the year-earlier price and adding $2.8 billion in year-over-year fuel expenses.

NBC News - Across Delta, United, American, Southwest and Alaska, third-quarter passenger revenue increased nearly $8.8 billion, or 18%, while passenger traffic rose less than 1%.

NBC News - Six major U.S. airlines planned domestic capacity growth of 3.0% in the fourth quarter and 3.8% in the first quarter of 2027, compared with 0.2% in the third quarter.

NBC News - United’s leisure load factor fell 1.3 percentage points in the third quarter. American’s planes were less full as passenger yields increased more than 18%.

NBC News - U.S. airfares rose nearly 23% year over year over the seven months through September, compared with a 3.6% average increase in consumer prices. Fox Business reported fares were up 22.4% year over year in September.

NBC News - JetBlue initiated a $10 one-way increase in domestic published fares; United had led a similar increase and Southwest matched it.

NBC News - TSA screened 2.9% fewer people at U.S. airports in the quarter year over year. Southwest reported average passenger fares had risen nearly 22% in the first nine months.

WHERE:

NBC News - Gulf Coast spot jet-fuel prices were $4.63 per gallon on October 20, compared with $2.43 before the war in February.

WHY:

Fox Business - May said fares might stay “largely where they’re at right now” if fuel prices fall; if fuel rises, airlines need higher fares and yields to offset the added expense.

NBC News - Airlines favored pricing discipline and capacity restraint to protect profits as soaring jet-fuel costs squeezed earnings; jet-fuel prices had risen roughly 90% since the U.S.-Israeli war on Iran began.

Fox Business - American said higher fuel prices would slow its network growth compared with 2026.

HOW:

NBC News - Airlines sought higher revenue per passenger rather than fuller planes, accepting some lower occupancy and avoiding discounts. May said American was reassessing whether added flights would earn enough to cover operating costs.

Fox Business - May said real-term ticket prices had not fully recovered after COVID-19 disruptions; he said the increases “ideally should have happened back in 2024,” but industry oversupply had delayed them.

(UPDATED October 23, 2026 20:05 UTC)

Airlines are prioritizing higher fares and profit margins over filling every seat, as soaring fuel costs squeeze earnings. Across Delta, United, American, Southwest and Alaska, third-quarter passenger revenue climbed nearly $8.8 billion, or 18%, while traffic rose less than 1%. U.S. airfares were up nearly 23% year over year through September, far outpacing consumer prices, and JetBlue has now raised published domestic fares by $10 one way. American’s revenue rose 19% in the third quarter, but fuel expenses jumped 67.5%, adding $1.9 billion. The company now expects a full-year adjusted loss of $1 to $1.60 per share, and forecasts fourth-quarter fuel costs of about $4.70 a gallon. American CFO Devon May said fares could stay elevated even if fuel prices fall, while higher fuel costs would slow network growth. Airlines are accepting somewhat lower occupancy rather than discounting, and plan faster capacity growth in the coming quarters.