Not long ago, a traveler with a flexible schedule and a sharp eye could snag a $49 one-way fare from Chicago to Los Angeles, a $299 round trip between San Francisco and New York, or even a $399 transatlantic deal from Miami to Frankfurt. Those prices are now extraordinarily rare and according to some of the most powerful figures in the airline industry, they may not be coming back at all.
The warning has been building for weeks. Delta CEO Ed Bastian was among the first to say publicly that airfares might not decline after the ongoing Iran conflict, a development that has sent crude oil prices surging past $100 per barrel on the futures market. In some regions, Dated Brent oil priced for immediate delivery has climbed to upwards of $200 per barrel, suggesting that futures markets may not be fully capturing what airlines are paying right now. Bastian also noted that Delta’s most premium customers are largely insulated from the pinch, a comment that drew criticism from everyday travelers already worn down by years of price increases since the pandemic.
Alaska Airlines says higher fares are holding
Alaska Air Group suspended its full 2026 financial guidance this week, a sign of the uncertainty rippling through the industry. But CEO Ben Minicucci made clear during the company’s earnings call that the carrier has already moved prices up with notable success, raising the average fare by roughly $25 while also increasing bag fees. Despite those moves, the airline’s planes are still flying full. Its chief commercial officer added that demand has not meaningfully softened a signal that travelers, for now, are absorbing the increases. Alaska is also pushing forward with new international routes, treating the current environment as an expansion opportunity rather than a reason to retreat.
United Airlines is targeting fare hikes of up to 20%
United Airlines delivered some of the bluntest language yet. The carrier announced it would cut capacity by 5% from its original projections and trimmed its full year forecast, both tied directly to elevated fuel costs. CEO Scott Kirby said fares would need to rise between 15% and 20% for the airline to fully recover what it is spending on fuel.
United Chief Commercial Officer Andrew Nocella went further, suggesting the increases could outlast the crisis that triggered them. The longer fuel stays at current levels and the longer travelers pay the new prices, he said, the more likely it becomes that those fares simply stay elevated even if oil eventually pulls back.
Airlines have been playing catch up for years
To understand why carriers feel justified in raising prices now, it helps to look at the longer trend. Data from the Bureau of Transportation Statistics and the Bureau of Labor Statistics shows that U.S. airfares have lagged the overall rate of inflation for most of this century. A Deutsche Bank analyst report reinforced that finding specifically during the pandemic period, noting that fares fell well behind inflation during that stretch.
That gap is now closing and then some. In March, Consumer Price Index data showed the average U.S. airfare reached $291.07, the highest level since October 2022. That spike came during another oil shock, when Russia’s invasion of Ukraine pushed crude prices past $100 per barrel. The current situation mirrors that moment, with the Iran conflict driving a nearly identical surge in energy costs.
The industry is doubling down on premium revenue
The broader business strategy behind these fare increases goes beyond simply covering fuel bills. U.S. airlines have struggled to generate meaningful returns for investors in recent years. The U.S. Global Jets ETF has returned roughly -0.77% over the past five years, a stark contrast to the S&P 500’s approximately 70% gain over the same period.
In response, carriers like Delta and United have aggressively expanded their premium cabin offerings and deepened their credit card partnership programs moves that have added new, more stable revenue streams that don’t depend on the back of the plane filling up with bargain hunters.
Delta has set a target of $1 billion in quarterly profit, a figure it could reach as soon as the current quarter. United is aiming for a 10% pre-tax margin by 2027. These are ambitious benchmarks, and airlines have made clear they intend to meet them by passing higher fuel costs fully onto passengers rather than absorbing them internally.
For travelers, the message from across the industry is the same: the affordable flight, once a staple of American life, is becoming something harder to count on and airline executives are not apologizing for it.