Why flights are so expensive and will likely stay that way

Wherever volatile fuel prices head this year, don’t expect bargain flights.

Airfare in the U.S. in June was up 26.5% compared with a year earlier, according to the latest federal data.

Airline leaders say customers continue to book even after carriers hiked fares. They told Wall Street analysts this month that they’re expecting to hold onto that pricing power at least through the rest of the year, if not longer.

Traveler Marjorie Aran said she and her husband paid a combined $800 to go from New York to Chicago in economy on United Airlines this week to visit their daughter.

“We used to go to Chicago for a couple of hundred dollars,” she said. Asked if she would skip a trip because of the fares she said no. “We can afford it.”

Airlines are betting that stays true for millions of consumers.

The average Southwest one-way fare, for example, was $225.61 in the second quarter, up from $186.65 during the same span of 2025.

“Despite high fuel and high prices, we’re seeing really strong demand,” Southwest Airlines CEO Bob Jordan told CNBC’s “Squawk on the Street” in late July.

United said it expects to pay about $6 billion more for fuel this year than it expected at the start of 2026. American Airlines forecast a $6 billion increase in fuel costs compared with last year, each a jump of a more than 50% from 2025. Both carriers said demand is still strong, even as they’re passing costs on to customers with higher fares.

“We observed minimal to no negative impact on demand from higher price points, a trend we see continuing,” United Chief Commercial Officer Andrew Nocella told Wall Street analysts on the company’s July 16 earnings call. The carrier expects unit revenue year over year for the rest of 2026 to rise and even exceed the second quarter’s increase, he said.

Airlines are eager to make up not just the billions of dollars more they’ve paid for fuel this year, but also to cover higher costs of labor, maintenance and basic operating expenses like increased airport fees.

“Labor costs have escalated dramatically. Maintenance is off the charts in terms of escalation. And those are all costs that every single airline pays the same,” United CEO Scott Kirby said on the call.

The surprise surge in fuel costs — airlines’ biggest expense after payroll — was a shock to the industry. Airlines pruned schedules this year, which can mean fewer flights per day or week on a certain route. That leaves customers with a lower number of flights to choose from and can lift fares.

According to S&P Global Energy Platts data, jet fuel prices have eased from four-year highs in April, but are still up about 50% since Feb. 28, when the U.S. and Israel’s strikes on Iran kicked off the monthslong military conflict that has choked off a main shipping channel for months.

United said its fuel costs rose $575 million from the start of July until mid-month as it was reporting results, knocking $1.12 off of third-quarter adjusted earnings.

In a sign of how seriously…