US Airfares Set to Stay High Despite Iran Ceasefire
US domestic airfares are up 26.5% from last year, and globally they've increased by 25-30% compared to 2025, according to June's consumer price index data.
The conflict between the US and Iran has driven jet fuel prices higher, with a barrel now trading at around $149, a 65% increase since January. Jet fuel is the biggest operating cost for airlines, making up between 30-35% of their expenses.
Airlines have limited ability to control these costs, but some may hedge against price volatility or buy on the spot market. However, with demand persisting despite higher prices, carriers can continue to charge more.
Experts predict that even if a lasting ceasefire brings down oil prices, airfares will remain high due to capacity constraints and reduced global refining capacity.