Airfares set to rise as Middle East conflict boosts jet fuel costs

The US–Middle East conflict is pushing airfares higher and could raise travel costs for customers through multiple channels, including higher fuel expenses, fewer low-cost options, and additional airline fees. “We are seeing summer fares rise due to higher fuel costs,” said Hayley Berg, chief economist at Hopper.

Fuel costs drive higher ticket prices

Berg said that for domestic U.S. flights, higher fuel costs have pushed summer fares up by about 10%. She noted that passengers may see fewer cheap fares and higher charges as airlines attempt to offset increased operating costs. Still, ticket prices are largely determined by supply and demand. “The higher fares, the fewer people fly, or they switch to ground travel,” said Zach Griff of From the Tray Table.

Fuel is typically one of the largest airline expenses, accounting for about 20–30% of total costs, according to airline financial reports. IATA data show Jet A1 fuel averaging around $175 per barrel last week. Before the Middle East conflict intensified in late February, Jet A1 was around $90 per barrel.

Airlines quantify the hit to costs

Delta Air Lines said fuel costs in March were more than $400 million higher than a year earlier. United Airlines CEO Scott Kirby told employees that if fuel prices stay at current levels, the carrier will have to spend an extra $11 billion this year. “To compare, in our best year ever, we earned less than $5 billion,” he said.

Kirby said United would need to raise fares by roughly 20% to fully offset the extra fuel costs, but that could dampen demand.

Airlines shift costs to passengers via fees and fewer options

To pass costs to customers, airlines are increasing ancillary charges. United increased baggage fees starting Friday (3/4). For tickets purchased from April 3, 2026, the first and second checked bags will cost an extra $10 per bag, while the third bag will increase by $50 in most markets. JetBlue also announced a $10 increase on most baggage fees due to higher operating costs. Griff predicted many carriers could follow suit.

“We understand price increases aren’t ideal, but they’ll be used only when necessary,” JetBlue said in a statement this week.

Airlines are also trimming capacity to reduce costs, which can raise travel costs by limiting availability. United expects to cut about 5% of flight capacity in the next six months, including peak summer. Other carriers are adjusting schedules similarly.

Capacity cuts and fare mix changes

Kirby said the capacity changes are intended to prepare for a scenario in which oil prices stay above $100 per barrel through 2027, possibly reaching a record $175. As a result, United will cut cheap services such as red-eyes and flights on Tuesdays, Wednesdays, and Saturdays.

“Vacation travelers will bear the brunt the most, not only because fewer options but also higher fares,” Griff said.

Demand remains strong, but risks persist

Even with higher fares driven by fuel costs, demand for air travel remains strong, suggesting airlines may still have pricing power. In the past month, many airlines reported record bookings. Higher fuel costs could also boost demand for air travel as driving becomes more expensive for long trips.

Delta CEO Ed Bastian told investors that the airline is positioned to absorb part of the shock. “We are in a good position to offset part of the fuel-cost shock,” he said, adding that the best five days of ticket sales for Delta occurred after the Iran conflict escalated. He also noted that when carriers raise prices, it typically takes 2–3 months for those increases to be fully reflected in fares.

However, if oil prices continue to rise, travel demand could weaken, making it harder for airlines to raise fares. “If our fuel-price forecast is correct, the economy in general will feel the impact,” Kirby said.