Jet Fuel Prices Are Falling, but Airfares Won’t Follow Soon
Jet fuel prices have fallen sharply from their April 2026 peak, dropping to $2.80 per gallon — the lowest level since the Iran war began on February 28. But travelers hoping for cheaper summer flights are likely to be disappointed: airlines are not expected to pass those savings on to passengers anytime soon.
According to NPR, the average price of jet fuel in the U.S. stood at $2.80 per gallon as of June 16, down more than $2 from the April peak, though still higher than pre-war levels. The decline follows a preliminary U.S.-Iran agreement announced on June 17-18 that could eventually reopen the Strait of Hormuz, the critical maritime chokepoint through which roughly 20% of global seaborne jet fuel exports pass.
Why Airlines Aren’t Cutting Fares
Industry experts point to several reasons why lower fuel costs won’t translate into lower ticket prices. “If people will pay it, why would you take it back?” Michael Boyd, a longtime aviation consultant at Boyd Group International, told NPR. “If people are willing to pay an extra $5 to check a bag and there’s no pushback, don’t be silly.”
Airlines face rising costs across the board. “We have labor costs coming up. We have operational costs going up at airports,” Boyd added. “So in terms of looking forward to a future of bright low $59 fares, that was on another planet long, long ago.”
The New York Times reports that operational costs are “baked in now for the next three or four months for most airlines, with little room to be able to maneuver,” according to John Grant, chief analyst at aviation data provider OAG. “It’s not a simple cause-and-effect relationship. Oil coming down by 10 percent doesn’t mean prices come down by 10 percent.”
The Financial Toll on Airlines
U.S. airlines lost a combined $966 million after taxes in the first quarter of 2026, according to data from the U.S. Bureau of Transportation Statistics cited by Scripps News. That compares to a $209 million loss in Q1 2025.
Globally, the picture is equally stark. The International Air Transport Association (IATA) projects global airline net profits will fall from $45 billion in 2025 to $23 billion in 2026, with profit margins of just 2%. IATA Director General Willie Walsh told the industry’s annual summit in Brazil that average jet fuel prices are expected to be 70% higher year-on-year, adding $100 billion to airlines’ collective fuel bill, as reported by Forbes.
The Strait of Hormuz Factor
Even with a preliminary diplomatic agreement in place, the Strait of Hormuz remains effectively closed. Toril Bosoni, head of oil markets at the International Energy Agency, said it could take six to eight months in a best-case scenario to fully reopen the strait, according to Forbes. Damaged oil infrastructure, insurance concerns, and shipper hesitation will keep fuel supply constrained.
JetBlue CEO Joanna Geraghty told Bloomberg at the IATA meeting that “even if the war were to end, we’re not planning for oil prices to snap back overnight. We think it’s going to be a longer, protracted sort of unwind of the escalated fuel prices.”
Pricing Power and the New Normal
United Airlines CEO Scott Kirby said during an earnings call in April that the airline has recouped less than half of its increased fuel costs so far, but expects that number to climb as fuel prices decline. “The longer this lasts, the higher the probability goes that the pricing increases hold,” Kirby said. “If things went back to mid-February normal, I think we get to keep 20% of the price increase next year.”
Average airfares have declined slightly in recent weeks, according to tracking firms like Kayak and OAG, but they remain more than 20% higher than this time last year. The average domestic ticket rose from $293 in January to $383, according to Kayak data cited by Scripps News. Domestic summer fares are up 17-18% compared to last year, while international fares are roughly flat year-over-year, according to Going spokesperson Katy Nastro.
What Travelers Should Expect
For the immediate future, travelers should brace for continued elevated prices. Aircraft delivery delays from Boeing and Airbus — with a backlog of over 18,000 aircraft — are forcing airlines to operate older, less fuel-efficient jets, further compounding maintenance costs. Smaller carriers like JetBlue, which hasn’t turned a profit since 2019, are especially vulnerable.
Looking ahead, if the Strait of Hormuz reopens and fuel prices continue to decline, some fare reductions may materialize in late 2026 or early 2027. But as Scott Kirby’s comments suggest, airlines are likely to retain a portion of the price increases even after fuel costs normalize, potentially establishing a structurally higher baseline for airfares.