Jet Fuel Costs and Spirit Airlines Collapse Set Stage for Record Summer Airfares

Higher fuel prices are testing how badly consumers want to travel this summer, whether flying or driving. Airfare has not been this high since May 2022, when airlines stumbled out of the pandemic with aircraft and employee shortages to face hordes of consumers ready for "revenge travel." Gasoline is above $4 a gallon and could get closer to $5 a gallon this summer, AAA warned this week.

Fuel Price Surge and Its Drivers

Jet fuel prices doubled in the span of less than three months this year after the United States and Israel attacked Iran, kicking off a conflict that has left a key shipping channel effectively closed. Domestic round-trip airfares in April averaged $623, the highest in nearly four years, according to data from the Airlines Reporting Corporation, which tracks travel agency ticket sales. Jet fuel is the second-biggest expense for airlines after labor, and carriers say they are increasingly passing those costs along to customers. Separately, airlines are also trimming their growth plans because of higher fuel costs. Even if a route is not cut, fewer flights on certain routes means that customers will have fewer seats to choose from and, with demand robust, that could drive up prices even more.

Spirit Airlines Collapse and Industry Impact

Spirit Airlines, the most famous budget carrier in the United States, shut down earlier this month, and partially blamed jet fuel prices for its failure to emerge from near back-to-back bankruptcies. It was the biggest U.S. airline collapse in decades. Other airlines swooped in to snatch up those customers in the aftermath, but the carrier's demise removes a main purveyor of low fares. The fuel spikes have set the stage for higher fares and more expensive gas station visits this summer. The start of the peak travel season, Memorial Day weekend, will be a taste of how much travelers will shell out to fly while everything from groceries to clothing has become more expensive this year. The Transportation Security Administration said it expects to screen 18.3 million people between Thursday and next Wednesday, compared with the 18.5 million it saw over a similar period last year.

Airline Spending and Forecast Adjustments

United Airlines slashed its 2026 forecast as fuel costs surge, but demand remains strong. Lufthansa faces nearly $2 billion in extra fuel cost amid the Iran war, after axing 20,000 flights. U.S. airlines spent 56.4% more on jet fuel in the month after the Iran war started, according to U.S. government data. From train travel to staycations: holidaymakers are adapting to airlines’ jet fuel shortage. U.S. airlines are hiking fares, and travelers keep booking.

Road Trip Growth Stalls

Road trips will not be a bargain either. AAA this week forecast 39.1 million people will drive at least 50 miles between Thursday and Monday, up just 0.1% compared with last Memorial Day weekend. That was the least growth in a decade, AAA told CNBC. Gasoline price site GasBuddy forecast this week that prices across the United States will average $4.48 on Memorial Day, up from $3.14 last year, and that prices could average $4.80 through Labor Day "if the Strait of Hormuz remains closed for a significant portion of the summer."

Consumer Travel Intentions Hold Steady

Leisure travel intentions in the United States were slightly lower in March — at 82.8% compared with 83.1% the same month a year earlier — though they are still relatively high, UBS said in a note Monday. "We believe the year-over-year moderation in travel intentions this year was likely due to higher jet fuel and other geopolitical concerns," UBS airline analyst Atul Maheswari wrote. He added that the intent to travel is near the highest points in the past nine years. So far, airline executives said, customers

Market Context

As of today, May 26, 2026, the U.S. dollar trades at 71.55 Russian rubles (change: 0.34), and the euro trades at 85.45 Russian rubles (change: 2.90). Bitcoin is at $77,159 (24-hour change: -0.1%). The S&P 500 is estimated at approximately 5,900, and the NASDAQ is estimated at approximately 19,200. Oil is estimated at around $72 per barrel.