A drop in jet fuel prices will not automatically lead to lower air fares, at least not in the near term, according to American Airlines’ chief financial officer.
In an interview with the Financial Times published on Thursday, Devon May said ticket prices will at best remain stable.
“If fuel comes down, I think air fares probably stay largely where they’re at right now,” May told the outlet. “If fuel prices go up, we need to generate higher yield, we need to generate higher fares to offset that higher fuel price.”
Jet fuel prices have effectively doubled since the start of the U.S.-Iran war in February, and fares have risen along with them, though Airlines For America has said that most U.S. carriers are absorbing the majority of the shock.
The impact of higher spending on fuel became clearer this week as numerous U.S. airlines slashed their full-year financial guidance. Many carriers are performing well, with resilient demand propping up record-breaking revenues, but fuel bills are eroding profits, with no relief in sight. American, United, and Southwest said this week that they expect to spend even more on fuel in the fourth quarter based on projections from mid-October.
May said part of the increase in ticket prices is actually a correction from the COVID-19 pandemic, which temporarily collapsed demand worldwide.
“This ideally should have happened back in 2024, but the industry found itself in an oversupply environment… This was the first year that everything came together in a way that we were able to push yields back up to where they were seven years ago in real terms,” he said.
American said on Thursday that it expects an adjusted loss per diluted share between $1 and $1.60 for all of 2026.
The airline anticipates an average fuel price of about $4.70 per gallon in the fourth quarter, nearly double the price paid in the same period in 2025. At that price, American’s fuel expense would increase by about $2.8 billion compared to a year ago.
The carrier said it will slow network growth in 2027 as result of the headwinds from fuel.