American flyers still smarting from interminable airport security lines are about to get another shock.
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A looming global jet fuel shortage is expected to hike the cost of air travel and reduce flight schedules, as airlines look to offset rising prices.
On Monday, JetBlue announced it was raising baggage fees, citing “rising operating costs.”
“While we recognize that fee increases are never ideal, we take careful consideration to ensure these changes are implemented only when necessary,” the carrier said.
United Airlines CEO Scott Kirby said costs to passengers have already been increasing. Data from flight information group OAG shows average airfares in the past week reached $465, the highest price point for the same period since at least 2019.
“We have to raise prices to deal with higher fuel prices,” Kirby acknowledged at a company event last week in Los Angeles. In a subsequent memo, he added: “It may be a challenge to continue passing through much of the increased fuel price if oil stays higher for longer.”
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The rising prices are the latest example of the economic fallout from the war with Iran. Analysts have started warning that the full toll has only begun to be accounted for as the global economy absorbs the loss of critical energy exports out of the region due to the closure of the Strait of Hormuz and damage to other key energy infrastructure sites in the region. On Tuesday, U.S. gasoline prices hit $4 a gallon for the first time since 2022 amid surging oil prices. Major stock indexes, meanwhile, have fallen by nearly 10% since the start of the war.
In the case of air travel, the industry is facing jet fuel prices that have surged 85% in the U.S. since the day before the war began in February, according to data from Argus published by the industry group Airlines for America. On Monday, they hit a record $4.62 a gallon.
Most U.S. carriers no longer hedge fuel costs, said Henry Harteveldt, president of Atmosphere Research Group. So they are forced to pass on some costs to passengers.
While U.S. carriers largely source jet fuel domestically, countries in Asia and Europe that are more reliant on Middle East stocks have begun signaling they are taking unprecedented measures to conserve jet fuel. In South Korea, carriers have requested that the government help redirect fuel stocks bound for export back to local markets.
The Financial Times reported Monday that the U.K. was also facing an acute shortage, with no Britain-bound cargoes visible on the water as transit through the Strait of Hormuz remains blocked. Some foreign carriers have begun charging fuel surcharges of as much as $150.
As overseas carriers begin looking to alternative supply bases, the cost for a global commodity like jet fuel rises across the board.
“It shocks the entire mechanism,” said Jaime Brito, an executive director at Oil Price Information Service consultancy.
President Donald Trump commented on the jet fuel shortages Tuesday morning, though he did not mention their impact on U.S. travelers.
“All of those countries that can’t get jet fuel because of the Strait of Hormuz, like the United Kingdom, which refused to get involved in the decapitation of Iran, I have a suggestion for you: Number 1, buy from the U.S., we have plenty, and Number 2, build up some delayed courage, go to the Strait, and just TAKE IT,” he wrote on Truth Social.
Airlines are also signaling capacity cuts to cope with rising costs. United will drop about 5% of planned flights in mostly “off-peak periods” — like red-eye and midweek routes — during the second and third quarters of 2026 to further mitigate the cost increases.
“We’re certainly going to be nimble in terms of capacity to make sure that supply and demand stay in balance,” American Airlines CEO Robert Isom said at a JPMorgan conference earlier this month.
Kyle Potter, executive editor of the Thrifty Traveler, said most carriers have quietly been raising airfares since the Iran war began. He said airlines typically move in droves when making pricing decisions, so it is likely that other carriers may also soon begin raising baggage fees or seek other forms of ancillary revenue. Potter noted that unlike airfares, revenues from these fees are not subject to federal excise taxes.
As a result, the fees — unlike airfares — are unlikely to come back down assuming jet fuel prices recover.
Representatives for five other major U.S. carriers did not respond to a request for comment.
The acute fuel price increase comes as air travel demand has remained steady, with January and February ticket sales at or near records. While investors have taken airline stocks down some 25% since the start of the Iran war, Kirby said that customers appear willing to keep booking thanks to healthy demand even if airfare rises.
“The number of wealthy Americans who are traveling is bigger and wealthier than ever, and that is what much of the airline industry is relying on right now,” Potter said. “And that means they’re more immune to higher fees, higher fares and just getting turned off by negative news about travel.”
