US airfares expected to stay high even if Iran ceasefire drops oil prices, experts say
Summary
US domestic airfares are much higher than last year, rising around 26.5%, partly due to higher jet fuel prices caused by the US-Iran conflict and limited oil refining capacity. Even if a ceasefire lowers oil prices, experts say airfares are likely to stay high because of ongoing airline costs, reduced flight capacity, and strong travel demand.Key Facts
- US domestic airfares increased 26.5% compared to the previous year.
- Global airfares are up about 25-30% compared with 2025.
- Jet fuel prices rose sharply due to the Iran war, reaching about $149 per barrel in August from $90 at the start of 2026.
- Only about 10% of refined oil becomes jet fuel, making its supply more sensitive to disruptions.
- Several oil refineries have closed, reducing jet fuel supply and driving prices higher.
- Airlines spend 30-35% of their operating costs on jet fuel.
- Flight capacity is limited by delays in aircraft deliveries and staffing issues at the FAA, keeping fares high.
- Even with potential easing of conflict, it may take about a year for jet fuel and airfare prices to return to normal levels.
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