Airline Miles Lose Value as Iran War Drives Up Summer Fares

Travelers planning summer vacations are discovering that their airline reward miles and credit card points don’t stretch as far as they used to, as jet fuel prices have roughly doubled since the start of the Iran war on February 28. With airfares in April running 21% higher than a year earlier, according to the Labor Department, consumers who hoped to use accumulated miles for flights are finding they need significantly more points — or must settle for less desirable itineraries.

The Fuel Shock Behind the Squeeze

Jet fuel prices surged from approximately $2.50 per gallon on the eve of the war to $4.88 by early April, according to CNBC. The effective closure of the Strait of Hormuz has choked off supplies of both crude oil and refined products, with the top three global exporters of jet fuel — China, South Korea, and Kuwait — all essentially knocked out of business simultaneously, as NPR reported.

United Airlines CEO Scott Kirby has warned that ticket prices may need to surge by 15% to 20% to offset rising fuel costs, and that the airline could face an additional $11 billion in fuel expenses for the remainder of 2026 if prices remain elevated. Delta Air Lines projected a $2 billion increase in fuel spending for the second quarter alone.

How Dynamic Pricing Eats Away at Miles

Airlines have largely moved away from fixed award charts in favor of dynamic pricing, where the number of miles required for a ticket fluctuates with cash prices. Since airfares are rising due to fuel costs, the points needed for award seats rise automatically. A trip that required 25,000 miles last summer may now demand 35,000 to 50,000 miles for the same seat.

“There’s no question that dynamic award pricing, higher redemption rates on some domestic routes, and added fees have made it harder to find the outsized deals that travelers enjoyed a decade ago,” Brian Kelly, the travel and credit card rewards expert known as The Points Guy, told the Associated Press. “But that doesn’t necessarily mean points have lost value. It just means consumers need to be more strategic about how they redeem them.”

Baggage Fees Rise, But Cardholders Get a Break

Major U.S. airlines have raised checked baggage fees by $5 to $10 across the board. United raised its first checked bag fee from $40 to $50; Delta from $35 to $45; and American and Southwest to $45 and $50 respectively. However, travelers holding co-branded airline credit cards or those in upper loyalty tiers are largely exempted from these increases — making those cards more valuable than ever.

Adam Morvitz, CEO of the travel loyalty platform point.me, noted that “travel rewards cards are one of the best financial tools available to responsible cardholders, but they’re designed for people who treat them like a debit card.” He emphasized that carrying a balance with interest rates between 21% and 24% quickly erodes any savings from perks like free checked bags.

Hotel Points Are Shrinking Too

The devaluation extends beyond airlines. Hyatt overhauled its loyalty program in late May, moving from three tiers to five, with some elite properties costing up to 67% more points under the new system, according to the travel blog One Mile at a Time.

“If you’re sitting on hotel points, don’t sit and hoard them,” warned Sally French, who covers credit cards and loyalty programs for Nerd Wallet. “They quickly seem to be getting less valuable.”

Political Scrutiny Intensifies

On May 17, U.S. Senators Elizabeth Warren, Bernie Sanders, Richard Blumenthal, and Martin Heinrich sent letters to the CEOs of the six largest U.S. airlines, probing fare and fee increases and asking whether airlines would cap executive pay or limit stock buybacks to offset costs. The senators framed the price hikes as resulting from “President Trump’s war” in Iran, as reported by the Sierra Sun Times. The airlines have been asked to respond by May 29.

What Travelers Can Do Now

Despite the headwinds, sign-up bonuses on travel rewards cards remain at historic highs — some offering 100,000 to 150,000 miles for new cardholders who meet spending requirements. Kelly said these bonuses make it a good time to get a travel card, potentially offsetting some of the devaluation for new cardholders.

For those with existing points, experts recommend being flexible with travel dates and destinations, considering off-peak travel, and using points sooner rather than later. As the Iran war continues and the Strait of Hormuz remains effectively closed, fuel costs — and the airfares and mileage requirements tied to them — are expected to stay elevated for the foreseeable future.

“The market’s effectively seized up,” George Shaw, an analyst at the trade analytics firm Kpler, told NPR. “It will take a long time for it to get back to a semblance of normality, even in the most optimistic scenario.”