US airlines trade full planes for higher fares as passenger numbers fall

Carriers say record ticket prices and strong premium demand outweigh the first drop in traveller numbers since 2020

By LineZotpaper

Published23 October 2026

Read Time3 min

Sources2 outlets

Fewer people are flying in the United States this year, with airport screening numbers on track for their first annual decline since 2020, but the country's biggest airlines say they are happy with the trade-off: record-high fares are worth more than packed planes.

The number of passengers screened at US airport checkpoints is heading for its first year-on-year decline since 2020, yet major carriers say they are comfortable with that, preferring to capture higher fares than fill every seat.

American Airlines' load factor, a measure of how full its planes fly, fell to 83.4% in the third quarter from 86% a year earlier. "We're actively prioritizing yield versus load factor and really happy as we see it. It fits right in with the premium investments that we're making," American's chief commercial officer, Nat Pieper, said on the company's earnings call.

Fares keep climbing

Ticket prices have climbed sharply as airlines pass on higher jet fuel costs, their biggest expense after labour. September fares were up more than 22% from a year earlier, and fare tracker Hopper expects this holiday season to bring the most expensive tickets in years.

Southwest Airlines' average third-quarter fare was US$231.69, up almost US$50 on a year earlier, excluding the airline's new fees for checked bags and front-of-cabin seats. Its passenger count fell 3.2% to about 33.5 million, though both figures beat the carrier's forecasts. "Passenger fares came in about $3 above what our forecast was and the more important thing is that passenger volumes also exceeded our expectations," chief executive Bob Jordan said.

Since April, about 9.3 million fewer people have been screened at US checkpoints compared with the same period of 2025, according to the Transportation Security Administration, a drop of under 2%. Jet fuel prices are more than double year-ago levels, with US Gulf Coast spot prices at US$4.63 a gallon.

Not every carrier is shrinking

United Airlines flew 2.4% more passengers in the third quarter and lifted unit revenue by 16%, its biggest increase since the pandemic. "I've been pleasantly surprised at the industry's ability this year to raise yields and pass through much of the increase in fuel prices," chief executive Scott Kirby said. "So it's possible that airlines will continue to focus on yields at the expense of load factor and that alone could get us to double-digit margins next year."

American, United, Delta Air Lines and Southwest all cut their 2026 profit forecasts this month, and American is the only one of the four expecting to post a loss this year. Carriers are also trimming growth plans, which could keep seats scarcer and fares elevated. Demand for premium cabins remains strong.

Budget carriers Frontier Airlines and Allegiant Air, which cater to more price-sensitive travellers, report results in the coming weeks. Bank of America noted that some customers of Spirit Airlines, which went out of business in early May, may simply have stopped flying.

Analysis

Why This Matters

Air travellers face the most expensive tickets in years, with September fares up more than 22% year on year, just as the holiday travel season approaches.
Airlines' strategy shift, prioritising yield over filling planes, could keep capacity low and prices high even if fuel costs ease.
A sustained fall in passenger numbers would be the first since 2020, a sign of how far higher fuel costs have squeezed household travel budgets.

Background

Airlines have historically chased full planes as a measure of success, but the surge in jet fuel prices, more than double year-ago levels, has changed the calculus. With fuel a dominant cost, carriers are focused on recovering the spike through fares rather than flying more people. At the same time, the industry has been investing heavily in premium cabins, where seats command far higher prices, and executives say demand there remains robust even as price-sensitive travellers pull back.

Key Perspectives

Major carriers: Executives argue higher fares and strong premium demand justify the trade-off, and that their pricing power could support double-digit margins next year. Budget travellers: The pullback in passenger numbers, including travellers who may have stopped flying after Spirit Airlines' collapse, suggests price-sensitive demand is softening. Analysts and fuel markets: Jet fuel costs, such as the US$4.80 a gallon United expects to pay in the fourth quarter, will determine whether airlines' pricing power holds.

What to Watch

Fourth-quarter results from Frontier and Allegiant, which will show how budget travellers are responding to high fares.
Holiday-season ticket prices, which Hopper expects to be the most expensive in years.
Jet fuel prices and whether carriers keep trimming capacity, which would push fares higher still.

Sources

Fewer people are flying as airfare soars. Here's why airlines aren't worried · US Top News and Analysis
Fewer people are flying as airfare soars. Here's why airlines aren't worried · Business News

Checked

12 claims in this story checked against 1 source: 9 supported.

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SupportedPieper said: “We're actively prioritizing yield versus load factor and really happy as we see it. It fits right in with the premium investments that we're making,”US Top News and Analysis: “"We're actively prioritizing yield versus load factor and really happy as we see it. It fits right in with the premium investments that we're making," American Airlines Chief Commercial Officer Nat Pieper said on the company's earnings call Thursday.”
SupportedJordan said fares were about $3 above forecast and passenger volumes also exceeded expectations.US Top News and Analysis: “"Passenger fares came in about $3 above what our forecast was and the more important thing is that passenger volumes also exceeded our expectations," Southwest CEO Bob Jordan said on an earnings call Thursday.”
SupportedKirby said he was pleasantly surprised by the industry's ability to raise yields and pass through much of the fuel-price increase, and that continued focus on yields at the expense of load factor could get airlines to double-digit margins next year.US Top News and Analysis: “"I've been pleasantly surprised at the industry's ability this year to raise yields and pass through much of the increase in fuel prices," CEO Scott Kirby said on the company's earnings call Wednesday. "So it's possible that airlines will continue to focus on yields at the expense of load factor and that alone could get us to double-digit margins next year."”
Partly supportedUS airlines are trading full planes for higher fares as passenger numbers fall.US Top News and Analysis: “Major U.S. carriers have said capturing higher fares is more important than fully filling their planes or flying record numbers of travelers.”
Not in the sourcesTicket prices are at record levels.US Top News and Analysis: “Fares in September were up more than 22% from a year earlier, according to the latest inflation read. Fare tracker Hopper said it expects this holiday season to come with the most expensive ticket prices in years.”
SupportedUS airport screening numbers are on track for their first annual decline since 2020.US Top News and Analysis: “The number of people screened at U.S. checkpoints is on track for its first annual decline since 2020.”
SupportedAmerican Airlines' load factor fell to 83.4% in the third quarter from 86% a year earlier.US Top News and Analysis: “American's load factor, a gauge of how full planes are flying, fell to 83.4% in the third quarter from 86% in the same quarter of 2025.”
SupportedSouthwest's average third-quarter fare was US$231.69, up almost US$50 from a year earlier, excluding its new fees.US Top News and Analysis: “The average Southwest Airlines fare in the third quarter, for example, was $231.69, up close to $50 from a year earlier. That doesn't include Southwest's new fees, like its extra charges for checked bags or a seat closer to the front of the plane.”
Partly supportedSouthwest's passenger count fell 3.2% to about 33.5 million.US Top News and Analysis: “The airline's count of revenue passengers, however, fell 3.2% from a year ago, to about 33.5 million people.”
SupportedSince April, about 9.3 million fewer people have been screened at US checkpoints than in the same period of 2025, a drop of under 2%.US Top News and Analysis: “Since April — when airlines began warning in earnest about profits taking a hit from the spike in jet fuel — through Thursday, about 9.3 million fewer people were screened at airport checkpoints compared with the same period of 2025, according to the Transportation Security Administration. While that's down less than 2% from last year, it follows years of growth.”
SupportedUnited flew 2.4% more passengers in the third quarter and its unit revenue rose 16%, the biggest increase since the pandemic.US Top News and Analysis: “United Airlines flew 2.4% more passengers in the third quarter than it did a year ago, and said its unit revenue rose by 16%, the biggest increase since the pandemic.”
SupportedAmerican, United, Delta and Southwest all cut their 2026 profit forecasts this month, and American alone expects a loss this year.US Top News and Analysis: “American, United, Delta Air Lines and Southwest all cut their profit forecasts for 2026 this month when they reported earnings. American is the only one of the four that expects to post a loss this year.”