The Numbers Behind the Cuts
Jet fuel prices jumped 6.1 per cent in a single week to reach $181.46 per barrel, according to the International Air Transport Association. That increase is global, not confined to one region, and it has prompted three of the largest US carriers to rethink their fourth-quarter schedules.
American Airlines now expects to pay roughly $1 per gallon more for fuel in the final three months of the year than it forecast in July. That difference translates to an additional $1 billion on the carrier's fuel bill, according to Chief Financial Officer Devon May, who outlined the figure at Morgan Stanley's annual Laguna Conference. American is planning further capacity adjustments toward the end of the quarter in response.
United Airlines is pulling flights originally scheduled for December, though the carrier has not disclosed which routes will lose service. Chief Financial Officer Michael Leskinen said that if fuel remains expensive, the airline will make additional adjustments into the first quarter of 2027 and beyond. Routes that already operate with thin margins become unprofitable quickly when fuel spikes.
Southwest Airlines has cut roughly half of the modest year-on-year capacity growth it had planned for 2026. Chief Financial Officer Tom Doxey described further reductions as a natural response if prices stay elevated, though the airline later clarified that adjustments so far have been small and that Doxey was illustrating a potential scenario rather than announcing sweeping cuts.
Who Feels the Impact
The flights most vulnerable to removal tend to operate at less popular times or serve routes with lower demand. That includes services on Tuesdays and Saturdays, as well as very early morning or late-night departures. These flights already run on narrower margins, so when fuel costs rise, they are the first to disappear.
Budget-conscious travellers in the US face a particularly difficult environment. Spirit Airlines halted operations in May, removing a significant source of low-cost capacity from the market. Other budget carriers have shifted their focus toward passengers willing to pay for premium products, leaving fewer options for travellers looking for the cheapest seats.
Even so, overall passenger demand shows little sign of weakening. United reported that fourth-quarter bookings remain strong across premium travel, corporate demand and economy cabins. Leskinen said the airline has seen very little evidence of demand destruction. American Airlines expects third-quarter revenue to rise between 16 and 19 per cent compared with the same period last year.
That combination of strong demand and reduced capacity creates a squeeze. Fewer seats available at a time when people still want to fly makes it harder to find cheaper tickets, especially if fuel prices stay high into next year.
The European Picture
The fuel price increase is not a US problem alone. Jet fuel is a global commodity, and carriers in Europe are exposed to the same market forces. Fuel represents one of the largest operating expenses in aviation, and sustained increases influence decisions on capacity, routes and fares.
European airlines have some cushion through fuel hedging, which allows carriers to lock in part of their future fuel needs at predetermined prices. That reduces exposure to sudden short-term spikes, but it does not offer complete protection during a prolonged period of high prices.
The timing adds pressure. European aviation is already managing costs associated with fleet renewal, sustainable aviation fuel requirements and broader decarbonisation efforts. Aircraft delivery delays have forced some airlines to operate older, less fuel-efficient planes for longer than planned, which amplifies the impact of rising fuel costs.
What It Means for Fares
Higher fuel costs do not automatically translate into higher ticket prices. Airfares depend heavily on supply and demand. Airlines balance operating costs against the number of seats available and what passengers are willing to pay.
US carriers are already removing less profitable capacity, which shrinks supply. If demand stays strong, fares are likely to rise or at least remain elevated. If demand softens, airlines may absorb some of the fuel cost increase to keep seats filled.
The question for carriers on both sides of the Atlantic is whether the current spike in jet fuel prices is temporary or the start of a longer trend. If prices remain high into 2027, more capacity cuts are likely, and the impact on fares will depend on how passengers respond.
For now, the industry is watching the crack spread, the difference between crude oil prices and refined jet fuel. That spread has widened and become more volatile, meaning jet fuel costs have risen faster than crude oil prices. The correlation between the two has weakened, adding uncertainty for airlines trying to plan budgets and schedules.
Travellers looking for lower fares may need to adjust expectations. The combination of reduced capacity, strong demand and elevated fuel costs is reshaping the market, and the effects are likely to be felt well into next year.
