Fuel Shock Forces US Airlines to Trim Holiday Flying

Jet fuel prices are up 76% since February, and travellers are starting to feel it at the booking stage.

America's biggest airlines are cutting flights for the busiest travel weeks of the year as a renewed jump in jet fuel prices eats into their profits.

US carriers have removed about 3% of domestic seats between 25 November and 31 December, according to aviation data firm Cirium. Jet fuel reached $4.40 a gallon this week. That is up 15% in a month and 76% since the conflict with Iran began in late February.

A billion-dollar problem

American Airlines expects around $1 billion more in fourth-quarter fuel costs than it forecast in July. The airline says every one-cent change in the fuel price shifts its quarterly bill by about $10 million.

United has cancelled some December flights and warned that more changes could follow into early 2027. Southwest has halved its planned capacity growth for the year. "We've cut that about in half," said chief financial officer Tom Doxey, referring to the original target of 2% to 3%.

Demand holds, fares climb

Airlines say bookings remain strong in both premium and economy cabins. Most are cutting less profitable routes and off-peak flights rather than reducing schedules across the board.

For passengers, the result is higher prices. According to travel app Hopper, Thanksgiving fares are up 31% on last year and Christmas fares are up 23%, both ten-year highs.

"The remaining available seats tend to cost more," said Mike Arnot of Cirium.

What comes next

Investors will get a clearer picture on 9 October, when Delta Air Lines opens third-quarter earnings season. Analysts expect fuel to dominate the conversation. Airlines that can protect margins without losing customers will be best placed if prices stay high into 2027.