If you're holding out for airfares to drop now that fuel prices have cooled off, prepare for a longer wait than you'd like. US carriers and industry economists say ticket prices could stay high for months even after jet fuel costs fall — and the holiday season is already proving it.
The numbers are stark. US airfares in August stood 23% higher than a year earlier, according to the Labor Department. Booking platform Hopper reported the highest fares in a decade for holiday searches, with average round-trip domestic fares of $402 for Thanksgiving and $452 for Christmas — up 31% and 23% respectively on last year.
The root cause is a whipsaw in jet fuel markets. The Argus US Jet Fuel Index peaked at $4.88 a gallon in early April, crashed to $2.70 in June, then climbed again to $4.53 by mid-September — still nearly double the 2025 average. Globally, IATA's fuel monitor tracked prices swinging from $99 a barrel before the war in Iran began to $209 in April, before settling around $195 in September. Refinery damage in Russia from Ukrainian strikes and disrupted Middle East exports are squeezing supply, and because diesel and jet fuel compete for the same refinery output, shortages in one push up the other.
Here's the catch for travellers: airline pricing doesn't track fuel in real time. Carriers plan schedules months ahead and sell tickets even earlier — United had already booked roughly 35% of its final-quarter tickets when prices spiked, meaning it couldn't reprice them. CFO Mike Leskinen told investors he expects to recoup higher fuel costs through revenue over time, not immediately. American Airlines says every penny per gallon adds about $10 million to its quarterly fuel bill, with recent increases set to cost roughly $1 billion in the fourth quarter alone.
Airlines are responding by cutting less-profitable routes. United has pulled some December flights and flagged further reductions in 2027 if fuel stays expensive; American and Southwest are trimming schedules too, with American expecting slower growth next year.
What does this mean if you're booking? Waiting for last-minute deals is currently a bad strategy — Deutsche Bank data showed Allegiant's average same-day one-way fare jumping 21% in a week to $280, while American's hit $463. Fares that were sold when fuel was cheap won't get cheaper retroactively, and economists like Columbia Business School's Brett House see very little chance of surcharges being rolled back in the coming months. Even analysts who expect fuel to stabilise say prices need to decline and stay down for airfares to follow.
The practical takeaway: book holiday travel as early as your budget allows, skip the add-on fees where you can (checked bags and seat selection have been climbing too), and be flexible on dates and routes since thinner schedules mean fewer alternatives when flights fill up. Anyone banking on a January price correction should probably adjust expectations — the industry's own maths suggests relief will lag any fuel retreat by a good few months.
Story based on reporting from The Independent Travel.
