Airfares soared because of the war with Iran. It’s looking increasingly likely that prices won’t come down anytime soon.
Tensions in the Middle East have risen in recent days, pushing up oil prices. But even if the war ended and fuel costs fell, ticket prices could remain stubbornly high.
Travelers, particularly affluent ones who buy high-end seats, have been undeterred so far by the higher prices. Other costs for the airlines are up. And they are facing less competition. Spirit Airlines, which once offered tickets for less than $100, shut down this spring, and other low-cost carriers are struggling.
“It’s expensive to fly airplanes,” Scott Kirby, the chief executive of United Airlines, told Wall Street analysts in a conference call on Wednesday. Most companies in his industry will lose money this year, so fares will have to remain high, he said. “I think the tide has to rise for everyone or those airlines simply won’t exist.”
In September, airfares were 22 percent more expensive than a year earlier, according to federal data. The average cost of a round-trip Thanksgiving flight within the United States is currently about $389, about 39 percent more than it was at this time last year, according to Hopper, a booking app known for its price-tracking features. Similar flights for Christmas are averaging $452, up 22 percent from a year ago.
Fuel typically accounts for about 25 to 30 percent of an airline’s operating costs, behind only wages and employee benefits. So when jet fuel prices nearly doubled in March, airlines raised fares. Jet fuel prices fell in the spring, but have steadily climbed since July. Today, they are about as high as they have been since the United States and Israel began attacking Iran on Feb. 28.
American Airlines and United each said this past week that their fuel costs in the quarter that ended in September were nearly $1.9 billion higher than the same period last year. United said it had recaptured 72 percent of that cost, though it expected to recover the rest eventually.
Other expenses have increased, too. Landing fees and airport rents were up 9 to 14 percent in the third quarter from a year earlier for several airlines.
Airlines are also paying employees more after negotiating new labor contracts with pilots, flight attendants and other workers in recent years. American, Delta Air Lines and United each spent 7 to 10 percent more on salaries, wages and benefits during the first nine months of this year than they did in the same period in 2025.
Airline executives say ticket price increases are long overdue to cover such costs. Adjusted for inflation, the average fare for a flight within the United States last year was 25 percent cheaper than a decade ago, according to federal data, which does not include fees.
In the past, travelers could expect fares to come down once fuel prices fell. As costs dipped, airlines would have cut prices to win over as many customers as possible.
But the industry is changing. Carriers are less concerned with filling planes and more so with attracting customers who will pay for more comfortable seats and better service.
That is, in part, because budget carriers are no longer the powerhouses they once were. A little over a decade ago, Spirit had some of the industry’s highest profit margins. But Spirit shut down in May, after struggling with high costs and competition, notably from larger airlines that offered no-frills “basic economy” tickets to lure customers from Spirit and other low-cost carriers. The airline’s demise already appears to have contributed to higher fares in some places.
Southwest Airlines, which also had a reputation for bringing down prices, is remaking itself in the mold of American, Delta and United by charging bag fees and removing seats from its Boeing 737 planes to make space for more expensive ones with extra legroom.
Delta and United are by far the most profitable airlines today because they have focused on selling premium seats and keeping customers loyal by offering big spenders generous perks. The sale of economy cabin seats — once the bread-and-butter of airlines — now accounts for less than half of Delta’s revenue. American has said leisure travelers are buying nearly two-thirds of the airline’s premium and business-class seats.
John Dalton is one of the customers airlines covet. Mr. Dalton, an actor who teaches theater appreciation to older people in Miami, has always loved to travel. He first bought a business-class ticket a decade ago for a trip to Europe to celebrate overcoming cancer. Today, he tries to fly business on most long trips, even if it means reducing other spending.
“I was like, ‘OK, I’ll splurge on getting a business class seat,’ and then I liked it, which was the curse,” he said. “All of a sudden, you’re like, ‘Oh, this is the way it could be,’ to the point that I dread having to fly coach.”
Generally, customers have accepted double-digit fare increases with a “limited amount of resistance,” Delta’s chief executive, Ed Bastian, said on an earnings call this month.
And while budget travelers have pulled back a bit, some airline executives said they were not too anxious about losing a few customers. American, Alaska Airlines and United recently said they were flying slightly emptier planes while collecting much more revenue. That is “a trade we would make every day,” United’s chief commercial officer, Andrew Nocella, said on the earnings call.
The question now is whether airlines will be able to resist the urge to lower prices to fill those seats.
Some industry experts said airline executives were using their public statements, especially their conference calls with analysts, to signal to investors and one another that they did not plan to lower fares.
“They will willingly discount-shame anybody who has the temerity to try to break price,” said Robert Mann, an industry consultant and former airline executive.
Mr. Mann said there are fewer airlines in the United States than in the past, which means the remaining companies may feel less pressure to lower fares.
Airlines cycle between flooding the market with seats and retrenching. In 2024, carriers were optimistic about demand and significantly increased the number of flights they offered during the summer. The resulting glut of seats forced companies like Spirit to cut prices. That contributed to Spirit’s downfall, which has reduced the number of seats for sale, thus easing the pressure on airlines to lower fares.
Over a longer stretch of time, the balance could again swing back in the favor of travelers.
This month, Boeing received long-delayed federal approval to start delivering the largest version of its 737 Max plane. United and Alaska are expected to receive 19 and 22 of those planes next year. Southwest also expects to start receiving the smallest Max variant, which was certified in August.
And if the economy weakens and stocks fall sharply, many affluent travelers may rethink their spending on travel, opting for fewer trips, downgrading to economy seats or shopping around for lower fares.
Even travelers like Mr. Dalton have their limits. As major airlines start offering “basic business” fares that strip away perks like lounge access or extra checked bags, he is becoming more willing to shop around.
“It makes me feel less loyal to an airline,” he said, “if they’re nickel-and-diming everything.”
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