Airfares are staying high even as the jet fuel crisis fades

Published Fri, Jun 26, 2026 · 07:03 AM

[NEW YORK] A historic jet fuel crisis is now fading as prices fall globally, but US passengers are yet to see the benefit with airfares still elevated.

The US-Iran war triggered a global jet fuel supply crunch that prompted carriers to cut flights and raise prices. The shock was so severe that it spelled the end of operations for US budget carrier Spirit Airlines and brought on warnings that Europe was just weeks away from a shortage of fuel.

In Los Angeles, the US jet fuel pricing hub most acutely affected, prices doubled from pre-war costs at the end of April. But as of late June, about 80 per cent of that surge has been erased. Prices on the Gulf Coast, the US benchmark, tell a similar story

Still, US domestic airfares from the last week of June to the end of August are 15 per cent more expensive than they were at the same time in 2025, said Katy Nastro, a spokesperson for Going, an app that tracks cheap airfares.

And with consumer demand for air travel remaining high, airlines are unlikely to lower their fares.

The stubbornly higher prices offer a reminder that while the vital energy transit route, the Strait of Hormuz, has begun reopening, consumer pain from one of the largest oil supply shocks in history is far from abating.

Globally, refiners unleashed an unprecedented rush of jet fuel production in recent months, helping quell the price shock.

In the US, the blockbuster run of fuelmaking, over two million barrels a day, has stretched 10 consecutive weeks, far surpassing the prior record clip for aviation fuel production.

That fuel has been exported to quell crises elsewhere, been pumped into planes on US tarmacs and gone into commercial stockpiles.

But at least within the US, demand for flying has remained resilient even amid the higher airfares, Nastro said, especially given travel centred around the World Cup and the 250th anniversary of the US’ founding. And a meaningful number of flights once served by Spirit have not been replaced by other airlines, she said.

That gives carriers little incentive to slash fares that soared in response to jet fuel costs, especially as they seek to claw back costs from when fuel prices soared.

International travellers going to and from the US will see some respite, with airfares for the rest of the summer roughly unchanged compared to 2025, Nastro said. There are some exceptions: US-to-London round-trips are 27 per cent more expensive.

In the longer run, prices will likely fall more if and when demand eventually softens, according to Henry Harteveldt, an airline industry analyst at Atmosphere Research Group. But when they do drop, prior price shocks suggest that the lowest fares likely will not be as cheap as they were pre-war.

“The house always wins,” Harteveldt said. “If the marketplace is not demanding that an airline reduces its fares to the very lowest levels it was charging before, airlines are not going to lower those fares.” BLOOMBERG