U.S. airfares rise 22.4% as fuel pressures mount
Key Facts
U.S. airfares rose 22.4% year on year in September, according to the U.S. Bureau of Labor Statistics, as carriers' fuel costs climbed. The airfare index within the Consumer Price Index increased 1.2% from August on a seasonally adjusted basis. According to Axios, this was the tenth consecutive monthly increase. The string of increases pushed the government index to its highest level on record, the website reported. On operating costs, United Airlines said in its earnings release filed with the U.S. Securities and Exchange Commission that fuel expenses rose by $1.8 billion in the third quarter from the same period a year earlier, amid continued volatility in jet fuel prices.
Higher prices were reflected in Southwest's average passenger fare, which reached $231.69 in the third quarter, compared with $182.56 in the same period a year earlier. The company said in its earnings release that this represented a year-on-year increase of 26.9%. At the same time, its capacity fell 0.4% from the third quarter a year earlier. Reuters reported in September that the carrier had cut its planned capacity growth for 2026 by about half because of higher fuel costs. The report pointed to the possibility of further cuts if costs remained elevated, extending the company's response to operating pressures through adjustments to its expansion plans.
At Delta, premium products posted year-on-year revenue growth of 18% in the third quarter, according to the company's earnings release. The carrier attributed the performance to improved yields and load factors for these products. Revenue growth came alongside a 6% increase in premium seats, a slower pace than the rise in their revenue. Fuel pressures had already shown up in second-quarter results, when jet fuel costs and related taxes increased by $1.7 billion from the same period in 2025, according to the company's filing with the U.S. Securities and Exchange Commission. Delta attributed that increase primarily to an 80% rise in the average purchase price of jet fuel, illustrating the scale of the pressures that preceded the third-quarter results.
The mechanics of ticket sales and operational planning explain why declines in fuel prices are slow to feed through to airfares, according to the Associated Press. Airlines set their flight schedules in advance. They also plan the capacity they will offer on those flights before operating them. They sell tickets ahead of time, so prices for seats already sold are set before the airline incurs the fuel cost when operating the flight. The agency said airlines "cannot charge more for seats already sold if fuel prices suddenly jump," a constraint that ties the impact of cost changes to the timing of bookings and operations.
Airline shares had come under pressure during earlier phases of rising fuel costs. On July 23, American Airlines shares fell about 4% in premarket trading after the company cut its annual profit forecast because of higher fuel costs, according to Reuters. In a subsequent report published on September 16, the agency said American shares had fallen about 14% over the month preceding the report as fuel prices rose. United shares fell about 15% over the same period. Southwest shares lost about 11%, according to the same report, as the pressures spread to carriers reassessing their capacity and cost plans.
Looking ahead, United set out its fourth-quarter outlook in an investor update issued in October. The company expects adjusted earnings per share of between $0.50 and $1.50 for the quarter. Its estimates assume an average all-in fuel price of about $4.80 per gallon. Delta, meanwhile, expects to absorb a year-on-year increase of $6 billion in fuel costs for the full year 2026, according to its earnings release. The U.S. Bureau of Labor Statistics is scheduled to publish the October Consumer Price Index on November 10, 2026, including the next reading on airfares.