Air travel in the United States is getting more expensive, primarily because of a sharp rise in jet fuel prices. Passengers are increasingly canceling trips or switching to cars, but airlines do not yet see lower plane occupancy as a reason for concern: they would rather sell fewer seats at higher prices. At the heart of this trend is a shift in the industry’s priorities: instead of maximizing passenger numbers, carriers are looking to increase the revenue from each flight. This helps them offset fuel costs but makes travel less affordable, especially during the holiday season.
According to CNBC, airfares in the United States were more than 22% higher in September than a year earlier. Surveys and forecasts suggest that upcoming holiday trips could be the most expensive in years. NPR cites estimates from travel service Hopper showing that Thanksgiving tickets are up about 30%, while Christmas fares have risen by more than 20% compared with last year. The average price of jet fuel in the United States, according to Argus, has topped $4.75 per gallon—nearly twice last year’s level and close to a record high.
Rising costs are already changing travelers’ behavior. Some book tickets earlier, hoping to lock in a reasonable price; others cancel their flights or choose to drive. NPR reports on Maryland residents who decided to drive to Chicago because tickets for the whole family were too expensive. Other passengers, despite being “shocked” by the price increases, still buy tickets: trips to visit family and vacations planned well in advance are hard to simply cancel. Hopper economist Hayley Berg describes holiday demand as “sticky”: even when prices rise, people try to keep their usual travel plans.
However, some customers’ willingness to pay does not mean demand is unaffected by higher prices. According to CNBC, since April, about 9.3 million fewer people have passed through Transportation Security Administration checkpoints than during the same period a year earlier. That is a decline of less than 2%, but it breaks a multiyear growth trend. In the third quarter, American Airlines’ load factor—the share of seats occupied on its planes—fell to 83.4%, from 86% a year earlier. At Southwest, the number of revenue passengers fell by 3.2%, even as the average fare rose by nearly $50, to $231.69.
For carriers, these figures do not necessarily mean business is getting worse. American Airlines says outright that it is prioritizing “revenue over load factor.” In other words, the company is not trying to fill every seat at any cost if doing so requires cutting fares. Southwest CEO Bob Jordan said both prices and passenger volume were higher than the company had forecast. United, by contrast, carried 2.4% more passengers in the third quarter and reported a 16% increase in revenue per available seat mile. CEO Scott Kirby said carriers had managed to pass a significant share of higher fuel costs on to passengers through fares, and suggested that prioritizing revenue could help the industry achieve double-digit profit margins next year.
It is important here to distinguish between passenger numbers and the revenue generated by air travel. The load factor shows how full planes are, while yield measures how much revenue a flight generates, taking into account fares and the mix of passengers. If an airline sells fewer tickets at higher prices, its revenue may increase even as its load factor falls. Premium seats and business class also play a role: airlines say demand for these more profitable categories is holding up better. As a result, averages can mask very different experiences for passengers: affluent customers keep flying, while families on tight budgets cancel their trips.
Fuel is one of airlines’ biggest expenses, alongside labor. Carriers are trying to offset higher fuel costs by raising fares, but they cannot pass the entire burden on to passengers without risking a loss of demand. Chris Sununu, head of the industry group Airlines for America, says airlines are still absorbing most of the additional costs, although some inevitably get passed on to customers. Domestic oil production and refining capacity are helping cushion the impact in the United States; in Europe, Ryanair CEO Michael O’Leary estimates that fares could rise by 10–20% over the next 12 months. His forecast underscores that the fuel shock could develop into a longer-term problem rather than remain confined to a single holiday season.
The main takeaway from the two articles on aviation is that the industry is adapting to expensive fuel not only by raising prices, but also by changing its underlying business model. The priority is shifting from maximizing load factors to maximizing revenue per flight and per seat. For airlines, this is a way to protect profits; for passengers, it risks entrenching high fares and widening the divide between those who can afford to fly and those who will have to look for alternatives. Strong holiday demand is still supporting prices, but if the number of travelers continues to fall, carriers will have to choose between keeping fares high and bringing back discounts to fill their planes.
The first link provided concerns a different subject: The Washington Post reports that Elon Musk is prepared to fight potential investigations by Democrats if they gain control of either chamber of Congress after the midterm elections. A brief excerpt from the article says that a number of Democrats plan to use Congress’s powers to investigate Musk and his companies. Unlike the two articles on air travel, this piece does not address rising transportation costs and offers no basis for linking the political dispute involving Musk to higher airfares. The shared theme of the two articles on airfares and demand therefore does not extend to the Washington Post piece, which concerns a separate political story about possible congressional oversight of a powerful business figure.
