Higher fares, fewer seats: US airlines Brace for a New Normal as fuel costs Bite

Executives say higher ticket prices and fewer unprofitable routes are here to stay

By LineZotpaper

Published23 October 2026

Read Time3 min

US airlines are raising fares and cutting back on money-losing flights as jet fuel prices surge, with many executives signalling that the shift is permanent. Airfares rose 22 percent in September from a year earlier, the 10th consecutive monthly increase, and fuel bills are piling pressure on carriers across the industry. American Airlines reported its fuel bill jumped nearly 70 percent in the third quarter, adding $1.9 billion in costs, while Delta expects its fuel bill for the year to come in $6 billion above last year's.

Soaring jet fuel prices, driven largely by the war in Iran throttling supplies, are accelerating changes across the US airline industry. Carriers are raising fares, packing in more premium seats, and abandoning routes that do not turn a profit.

At Southwest Airlines, the average passenger fare rose 26.9 percent to $231.69 in the third quarter compared with a year earlier. Delta's premium-seating revenue jumped 18 percent even though the number of premium seats rose only 6 percent. United and Southwest both slashed their profit forecasts this week on higher fuel costs.

“None of them are hedging fuel the way they used to, in large part because they had a pretty terrible experience with it,” said Scott Keyes, founder of flight-deal service Going.com. That leaves airlines with little choice but to pass costs on to passengers.

United CEO Scott Kirby told investors that underlying costs such as airport fees and maintenance have risen so much that airlines must change their economics fundamentally. “One golden rule: don't fly places that lose money,” he said on the company's earnings call. “There's going to be less loss-making flying.”

American CEO Robert Isom said the fuel spike “has been a catalyst to allow us to realize that there is value,” pointing to strong demand from customers willing to pay higher fares.

Delta CEO Ed Bastian said on an earnings call on Oct. 9 that this year's fuel spike had only “accelerated” changes already underway. “Regardless of the next move in fuel prices, the forces reshaping the U.S. airline industry will continue,” he said.

Keyes noted that the demise of Spirit Airlines, widely seen as a victim of the fuel price spike, has made it easier for larger carriers to raise fares. “Spirit's demise is another factor in why you're seeing airfare go up so precipitously because they and other budget airlines act as something of an anchor for airfare in general,” he said.

The bottom line for travelers: higher fares and fewer choices, with little sign of relief. Even if jet fuel prices eventually fall, airline executives said they do not expect pricing to step backwards. “I'm pretty confident that we're not going to take steps backwards in pricing,” United's Kirby said.

Analysis

Why This Matters

Travelers face higher costs and fewer flight options as airlines cut unprofitable routes and expand premium cabins.
The shift could permanently alter the economics of air travel, with budget carriers squeezed out and less competition keeping fares high.
Fuel prices may ease, but airline executives have made clear that higher fares are unlikely to reverse.

Background

The war in Iran has throttled jet fuel supplies, sending costs soaring. Airlines, burned by failed fuel-hedging bets in the past, have largely stopped hedging, leaving them exposed. The spike has accelerated changes that were already underway, including a move toward premium-heavy cabins and a focus on profitable routes. The collapse of budget carrier Spirit Airlines, which was struggling before the fuel crisis, removed a key competitor that had helped keep fares across the industry in check.

Key Perspectives

Airlines: Executives at Delta, United and American argue that higher fares and a tighter route network are necessary to cover rising costs and generate sustainable returns. They say the changes are likely permanent, even if fuel prices fall. Travelers: Higher fares and fewer options mean more expensive and less convenient travel. Through Scott Keyes, the source notes that the loss of Spirit removes a downward pressure on pricing, giving airlines more room to raise fares. Critics/Skeptics: Consumer advocates may worry about affordability and reduced access to air travel, particularly for budget-conscious travelers. The source does not quote such critics directly, but the implications for passengers are clear.

What to Watch

Jet fuel price trends: any easing could test executives' insistence that higher fares are here to stay.
Airline route maps: further cuts to unprofitable routes will reduce connectivity for smaller cities.
Spirit Airlines' successor: whether another low-cost carrier emerges to fill the gap left by Spirit's exit.

Sources

Airlines' new normal: Higher fares, fewer flights · Axios

Checked

10 claims in this story checked against 1 source: 4 supported.

Show each claim

Not in the sourcesThe headline says US airlines have fewer seats.Axios: “airlines are raising fares and turning to more premium seats to squeeze more revenue out of their flights”
Partly supportedExecutives say fewer unprofitable routes are here to stay.Axios: “United's Kirby predicted that trend will continue across the industry. "One golden rule — don't fly places that lose money," he said on the company's earnings call. "There's going to be less loss-making flying," he predicted.”
Partly supportedIsom said the fuel spike “has been a catalyst to allow us to realize that there is value”.Axios: “American CEO Robert Isom said the fuel price spike "has just been a catalyst to allow us to realize that there is value,"”
Partly supportedBastian said the forces reshaping the US airline industry “will continue”.Axios: “"Regardless of the next move in fuel prices, the forces reshaping the U.S. airline industry will continue with many carriers struggling to earn their cost of capital well before the run-up in fuel," he said.”
Partly supportedSouthwest’s average passenger fare rose 26.9% to $231.69 in the third quarter year over year.Axios: “At Southwest, the average passenger fare rose 26.9% to $231.69 in the third quarter, compared with a year earlier — and that doesn't include fees.”
SupportedAirfares rose 22% in September year over year, the 10th consecutive monthly increase.Axios: “Airfares rose 22% year over year in September, marking a 10th straight monthly increase in the government's airfare price index”
SupportedAmerican’s fuel bill jumped nearly 70% in the third quarter, adding $1.9 billion in costs.Axios: “American Airlines reported today that its fuel bill jumped nearly 70% in the third quarter from a year ago, adding $1.9 billion in costs”
SupportedDelta’s premium-seating revenue rose 18% while its number of premium seats rose 6%.Axios: “Delta's premium seating revenue jumped 18% in the third quarter, even though the number of premium seats rose only 6%.”
SupportedThe war in Iran throttled supplies and largely drove the jet-fuel price surge.Axios: “The fallout from higher fuel prices — triggered largely by the war in Iran, which has throttled supplies”
Partly supportedSpirit’s demise was widely seen as a victim of the fuel-price spike.Axios: “While Spirit's troubles were many, the fuel price spike was widely seen as the last straw for the budget carrier.”