Airfares are up 23.4% in a year and Thanksgiving fares 31%, yet jet fuel at $4.40 is squeezing airline profit

Higher fares are not turning into higher profit at U.S. airlines. CNBC reported Monday that airfares rose 23.4% in August from a year earlier in the latest inflation data, that carriers expect double-digit revenue growth for the third quarter, and that Wall Street analysts have nonetheless cut profit estimates for U.S. airlines since a jump in jet fuel in the summer. Delta Air Lines opens airline earnings season on Friday.

The fuel number

The Energy Information Administration's spot price table shows kerosene-type jet fuel on the U.S. Gulf Coast at $4.399 a gallon on September 29, and between $4.29 and $4.40 on each of the six days it lists, September 22 to 29. That sits inside the $4 to $4.50 range that Raymond James analyst Savanthi Syth told CNBC would lead airlines to cut more flights. Our own distillate inventory report and crude oil chart cover the cause: jet fuel and diesel are tight because of lost refining supply abroad.

What the passenger pays

Hopper said that as of September 24 a domestic round trip over Thanksgiving averaged $402, up 31%, and Christmas averaged $452, up 23%, per CNBC. Working backward from those percentages, last year's averages were roughly $307 and $367 (our arithmetic). For a family of four, Thanksgiving travel comes to about $1,608 against about $1,228 a year ago, around $380 more.

For a small business with a sales team on the road, the same pattern applies to trips in late November and December. CNBC's Hopper source said many travelers are booking holiday trips earlier than usual and that this may leave bargains on the shoulder-season trips in between. That is one analyst's reading, not a guarantee.

Why fares can rise while profit does not

CNBC lays out three pressures. Airlines are passing fuel through as higher fares, fuel surcharges and checked-bag fees. Spirit Airlines collapsed in May, taking 1% to 2% of U.S. capacity out of the market, according to Barclays. And demand is resilient, with security screenings down only 1% through September 20 versus last year, per a Bernstein note. Against that, American Airlines said in July it expected an adjusted third-quarter loss of 10 to 70 cents a share and cut its 2026 profit outlook.

The next move is capacity. Barclays analyst Brandon Oglenski wrote that American and United have domestic capacity growth of 10% and 9% in current schedules, and that high fuel and refining margins mean most managements will curtail growth ambitions. Syth said fewer broad fare increases are likely now, but more flight cuts, which can raise fares anyway because customers have fewer seats to choose from. If oil fell and airlines added capacity broadly, CNBC says, fares could come down.

Where the stocks stood

At about 9:51 a.m. Eastern, per Nasdaq, Delta was $83.995 (down 0.1%), United $111.96 (down 0.5%) and American $12.915 (down 0.2%). Delta, the most profitable U.S. carrier, owns a refinery, which CNBC says gives it some protection from fuel costs. Its outlook for the end of the year is the number to watch Friday.

Sources: CNBC, October 5, 2026 (Hopper, Barclays, Bernstein, Raymond James and company statements as quoted there); U.S. Energy Information Administration; Nasdaq. The 23.4% August airfare figure is CNBC's reading of the latest inflation report, which we could not retrieve from the Bureau of Labor Statistics directly. Year-ago fares and the family-of-four comparison are our arithmetic. Some data may be delayed. This is market information, not investment advice.