Here's why airfare prices could stay high even if price of oil falls

Travelers could continue paying high airfares even if oil and jet fuel prices decline, major U.S. airlines and industry analysts say.

Airfares haven't moved in lockstep with fuel prices

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Airfares have not followed fuel prices closely. The average U.S. domestic airfare rose from $405 in the final three months of 2025 to $436 in the second quarter of 2026, according to the Bureau of Transportation Statistics. In August, airfares were 23% higher than a year earlier, according to the Labor Department.

But airfares haven’t moved in lockstep with fuel prices. The Argus U.S. Jet Fuel Index plunged from an early April peak of $4.88 a gallon to a wartime low of $2.70 in June, but average fares remained elevated.

This means travelers, especially those who buy tickets at the last minute, may be paying a price. The average same-day fare for a one-way domestic Allegiant Air flight jumped 21% in a week, to $280 on Sept. 18, according to a Deutsche Bank analysis of flight pricing. The comparable price for a same-day American Airlines fare was $463, up 6%.

Why airfare prices could stay high

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According to Brett House, an economist who teaches at Columbia Business School, jet fuel prices surged after the Iran war began, fell sharply in the spring and then climbed again over the summer. The swings have made it difficult for airlines to plan and given carriers little incentive to quickly lower ticket prices.

This means part of the disconnect between fuel prices and airfares comes down to timing. 

House explained that airlines typically decide several months in advance how many flights to operate and seats to offer, factoring in expected fuel costs and other expenses. They begin selling tickets even earlier. While prices for seats on the same flight can change repeatedly, airlines can't charge more for seats already sold if fuel prices suddenly spike.

"It’s not just the level of fuel costs that is a problem or a challenge for airlines," House said. "It’s also the volatility."

When fuel prices jumped, about 35% of United’s tickets for the final three months of the year were already booked, and the airline could not increase those fares retroactively, the airline’s Chief Financial Officer Mike Leskinen said. The airline expects to recover its higher fuel costs through revenue but not immediately, he said.

Speaking about the rising price of jet fuel at a Sept. 16 investor conference, Leskinen said, "I don’t actually care if it stays high. I just need it to stabilize."

Higher costs already affecting holiday travel

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According to the flight booking company Hopper, the higher costs are already affecting holiday travel. 

Hopper said round-trip domestic fares averaged $402 for Thanksgiving travel and $452 for Christmas during the previous week, up 31% and 23%, respectively, from last year.

"Major airlines including American, United and Southwest have responded to higher fuel costs by pruning some less-profitable flights, while airlines have also raised fares and baggage fees." United has also warned of additional cuts in 2027 if fuel prices remain elevated.

RELATED: Major airlines adjust flight schedules as jet fuel prices surge

Jet fuel prices need to fall and stay down for airfares to decline on a sustained basis, said Stephen Treanor, a finance professor at California State University, Chico, who has studied airlines’ exposure to fuel price risk.

This means, for travelers holding out for cheaper fares, the wait could outlast the war itself.

"The likelihood that fuel surcharges are going to be rolled back and airfares are going to be brought down is very low over the next few months," House added.