Hoping a drop in oil prices will bring down air fares? Don't hold your breath. American Airlines' chief financial officer Devon May has said that even if jet fuel costs fall, ticket prices are likely to stay put, because carriers are focused on clawing back profits after a bruising stretch of cost increases.
The backdrop: jet fuel prices have more than doubled since the Iran war began in late February, pushing US carriers towards heavy losses. American added $1.9 billion in fuel costs in the third quarter and now expects to lose $1 to $1.60 per share for the year, despite revenue rising 19 percent. Delta cut its profit forecast too, and United took a $1.8 billion fuel hit — though it managed to offset 72 percent of that through fare increases.
The numbers show how much prices have climbed. US Bureau of Transportation Statistics data puts the average base fare at $405 in late 2025, rising to $428 in the first quarter of this year and $436 in the second. Travel booking firm Hopper says holiday airfares are now at their highest levels in a decade: round-trip domestic flights average $402 for Thanksgiving (up 31 percent year on year) and $452 for Christmas (up 23 percent). Hotels are climbing as well, with Christmas rates averaging $197 a night.
There's a structural reason fares respond slowly. Airlines sell tickets months in advance, so sudden fuel swings can't be passed on straight away. Columbia Business School economist Brett House told The Independent that it's not just the level of fuel costs that hurts airlines, but the volatility itself — United's CFO Mike Leskinen put it bluntly at an investor conference: he doesn't care if fuel stays high, he just needs it to stabilise.
May also made a revealing admission: fares haven't fully recovered in real terms since the pandemic. An oversupplied market kept prices artificially low in 2024, and this year was the first time airlines managed to push yields back to where they were seven years ago. In other words, some of what travellers are seeing isn't just fuel pass-through — it's airlines using the moment to reset prices higher.
The interesting wrinkle is that demand is holding up. Delta raised fares roughly 20 percent without seeing a noticeable dip in bookings, and premium cabins, airport lounges and seat upgrades are boosting revenue across the industry. So long as passengers keep paying, there's little commercial incentive for fares to fall when fuel does.
For holidaymakers, the practical takeaway is straightforward: don't bank on last-minute bargains or on waiting for oil prices to ease. If you're booking peak-season flights — especially Thanksgiving and Christmas — earlier is likely to be cheaper, and flexible dates or flying on off-peak days remain the most reliable ways to trim the bill. Travellers who can shift trips to shoulder seasons will feel the pricing pressure far less than those locked into peak holiday windows.
