Travelers Keep Booking Even as Airline Fares Climb on Fuel Costs

Spring break travelers this year are paying significantly more for their tickets, but they aren’t canceling their plans. U.S. airlines have raised fares sharply since the conflict with Iran effectively shut the Strait of Hormuz two months ago, driving jet fuel prices through the roof. Yet booking data shows passengers are still flying, and carriers are betting the trend will hold through the busy summer season.

In March, travel-agency ticket sales hit $10.4 billion, up 12% from a year earlier, according to the Airlines Reporting Corp. Domestic trips rose 5%, while international travel inched up 1%. The average domestic economy ticket now runs $570, a 21% jump from last year, and premium seats average $1,444, up 17%.

“Bookings have remained resilient amidst these changes, which is an encouraging sign,” JetBlue CEO Joanna Geraghty said on an earnings call Tuesday. The war has added more than $6 billion to airline costs so far, but executives at major carriers like American, Delta, and United expect customers to absorb the increase. American CEO Robert Isom noted that load factors are keeping pace with capacity additions, suggesting higher fares are sticking.

The picture is tougher for low-cost carriers like Frontier and Avelo, which lack premium cabins to offset fuel costs. Their trade group is asking the Trump administration for $2.5 billion in relief. Budget airlines face particular pressure because their average fares are lower, making it harder to pass along expenses.

UBS analyst Atul Maheswari warns that even if oil prices fall, jet fuel costs could stay elevated due to refining and transport expenses. With airfares still below general inflation since the pandemic, he says there’s room for prices to climb further and remain high, especially if demand holds into 2027.