Rising Jet Fuel Costs Threaten Airline Earnings Despite Higher Ticket Prices
U.S. airlines are poised for strong third-quarter revenue, but record jet fuel prices are consuming much of that benefit. The average U.S. jet fuel price hit an all-time high in September and continued to climb. Delta is expected to be one of the few major U.S. carriers to post a profit this year.
U.S. carriers begin reporting third-quarter results Friday, starting with Delta. Although several airlines are expected to show record revenue, rising fuel expenses are absorbing much of that improvement. Jet fuel has been especially unstable since the Iran war began, and prices have climbed further as regional fighting has worsened.
By Thursday afternoon, the U.S. average stood at $4.50 per gallon, based on Argus Media figures distributed by Airlines for America. September’s monthly average reached a record $4.37, exceeding April’s $4.29. Delta is projected to be among the few large U.S. airlines posting a profit this year.
Higher fuel bills may keep pressure on airfares, leaving travelers with fewer cheap options even as airlines report strong sales. Carriers could respond by trimming routes, delaying expansions, or tightening costs, which may affect workers and communities that depend on aviation. Investors might see uneven results, with profitable carriers better able to absorb fuel swings. Small businesses and leisure travelers could face sustained budget strain if ticket prices remain elevated.