Major U.S. airlines, including United Airlines and Alaska Airlines, have lowered their profit forecasts for 2026 as jet fuel prices have roughly doubled since late February, reaching over $190 a barrel by early October 2026. This surge follows the closure of the Strait of Hormuz in February 2026 and ongoing geopolitical conflict.

These rising operational costs are forcing airlines to consider further fare increases and limit flight growth in 2027, potentially affecting travel plans and household budgets across the United States. The broader U.S. economy is also feeling the impact, with September 2026 Consumer Price Index data showing year-over-year inflation accelerating to 3.7% primarily due to energy costs.

What the records show

The International Air Transport Association's (IATA) Jet Fuel Price Monitor indicates that global jet fuel prices surged by over 111% in the past year, reaching a worldwide average of $190.18 a barrel in the week ending October 9, 2026. This represents a significant increase from the same period a year earlier. The closure of the Strait of Hormuz on February 28, 2026, triggered an "oil-and-refinery shock" that cut crude oil supply by approximately 10 million barrels per day, or 10% of global consumption. This disruption briefly pushed physical crude prices toward $150 per barrel. Jet fuel availability has been threatened, and its price has approximately doubled since late February.

U.S. airfares increased by 22.4% over the past year due to these soaring jet fuel prices. The U.S. Consumer Price Index (CPI) for September 2026, released in mid-October 2026, showed that year-over-year inflation accelerated to 3.7%, largely driven by a surge in energy costs, including gasoline and fuel oil.

Timeline

February 28, 2026: The Strait of Hormuz closed, causing an oil-and-refinery shock and threatening jet fuel availability.

Late February 2026: Jet fuel prices began to roughly double.

Week ending October 9, 2026: Global jet fuel prices averaged $190.18 a barrel, a 111.2% increase year-over-year.

Mid-October 2026: U.S. Consumer Price Index data for September 2026 was released, showing 3.7% inflation, primarily from energy costs.

October 20, 2026: United Airlines projected fourth-quarter adjusted earnings of 50 cents to $1.50 per share.

October 21, 2026: Alaska Airlines issued weaker-than-expected fourth-quarter forecasts.

What changed and for whom

Airlines are experiencing higher revenues, but their profit margins are narrowing due to increased operational costs. Major U.S. carriers, including United Airlines and Alaska Airlines, have lowered their earnings expectations for the year. United Airlines expects to pay approximately $4.80 per gallon for fuel in the fourth quarter, which is about 45 cents more than analysts anticipated. Alaska Air Group officials projected an adjusted fourth-quarter loss of $2 to $2.50 per share, estimating their annual fuel bill to be $1.8 billion higher than initially planned. Delta Air Lines also cut its 2026 earnings forecast earlier this month, anticipating its annual fuel expenses will rise by $6 billion compared to 2025.

Despite these financial pressures, passenger demand for air travel remains strong. However, most airlines are preparing to further increase fares as fuel hedging contracts expire. Some major U.S. carriers are considering limiting flight growth in 2027.

What the subject has said publicly

Robert Alvo, CEO of LATAM Airlines, stated at the 22nd annual ALTA AGM and Airline Leaders Forum that "The safe position to take today is that the high prices will be in place for a long time". Tony Fernandes, Air Asia co-founder, speaking at the Global Tourism Economy Forum (GTEF), noted that even airlines that hedged their fuel will soon be impacted as "A lot of people's hedges are coming off, and prices are going to go up dramatically". Chris Sununu, President and CEO of Airlines for America, discussed U.S. airfares and jet fuel prices on 'Power Lunch' on October 20, 2026.

What we could not confirm

The specific details of the US-Iran conflict that led to the closure of the Strait of Hormuz are not detailed. The precise timing and extent of future fare increases by individual airlines are not confirmed. The exact routes or capacity reductions that might occur in 2027 are not specified.