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The US and Israel's war in Iran, which is now in its third week, has pushed airlines to increase fares to cover soaring fuel costs. But that doesn't seem to deter travellers, The New York Times reported.
The war, which began in late February, has seen widespread disruptions in the aviation sector across the world due to ongoing airspace restrictions in the Middle East.
Travel demand is strong amid higher fares
On Tuesday, at an investor conference, several executives from major US airlines said that strong travel demand was helping to offset disruptions caused by winter storms and a steep increase in jet fuel costs since the war began. On Monday, jet fuel prices were approximately 50% higher than pre-war levels, the report noted.
According to a Forbes report, jet fuel, typically accounting for about one-fifth to one-quarter of airlines’ operating costs, rose to $3.93 per gallon on Tuesday on the Argus U.S. Jet Fuel Index, marking a roughly 57% increase since the war began.
Ticket transaction value jumps
New data from Consumer Edge shows that, among the six largest US airlines, average ticket transaction values rose between 2% at American Airlines and 16% at Delta Air Lines in the week ending March 8 compared with the prior week.
The New York Times, citing executives at American Airlines and Delta Air Lines, said each carrier faced about $400 million in additional fuel costs. However, they did not revise their profit outlook for the first quarter, citing continued strength in ticket sales. Both airlines also reported that eight of their 10 highest sales days on record have occurred so far this year.
American Airlines expects revenue for the first quarter to be up over 10 per cent compared with the same quarter last year, its biggest year-on-year quarterly jump.
Fares are up across the board
According to a pricing analysis by Deutsche Bank analysts, airfares have broadly increased since the conflict began. The sharpest gains have been seen in last-minute bookings, which are commonly made by business travellers.
On 12 March, the lowest fares for next-day flights to Asia, Europe, and beyond were roughly about $1,900 on average, The New York Times reported, citing data from Deutsche Bank. On 26 February, fares for similar last-minute flights to destinations across the Atlantic Ocean were at $830, while those across the Pacific were at $1,000.
The report suggests that fares for flights from one coast of the US to the other have also gone up by at least 16 per cent.
Additionally, fares for flights three weeks ahead, including leisure travellers, have also seen a jump since the war began. While fares on flights to Latin America were cheaper, on flights to Mexico, they were largely unchanged.
Airfares jump due to jet fuel price increase
The increase in airfares has largely been the result of surging jet fuel costs, which typically account for the second-largest operating cost for an airline after labour expenses. In 2025, jet fuel accounted for roughly 20 to 25 per cent of operating costs for most large airlines in the US.
Before the war began, jet fuel prices were roughly at $2.50 a gallon. On Monday, they touched $3.78 per gallon, according to Argus Media.
European airlines warn of higher prices
On Thursday, Reuters reported that European airline chiefs have warned that a prolonged war in the Middle East would likely impact airfares, pushing them higher as flight cancellations continue to drive up costs and jet fuel prices.
"The longer it goes on, the bleaker it will look," Michael O'Leary, chief executive of Ryanair, told Reuters. While most European airlines are currently protected by fuel hedges, those contracts are expiring in the coming months.
However, it remains to be seen whether European airlines will increase airfares in the coming weeks.
English (US) ·