U.S. airlines spent over $5 billion on jet fuel in March as Iran war bites
Investing.com -- Major U.S. airlines spent just over $5 billion on jet fuel in March, up 56% and $1.8 billion over the February costs, according to the U.S. Transportation Department.
The cost per gallon of fuel in March was $3.13, up 74 cents, and 31% over February. Fuel use rose 20% in March. Global carriers are contending with surging jet fuel prices since the U.S.-Israeli strikes on Iran disrupted traffic through the Strait of Hormuz, in the air travel industry's worst crisis since the COVID-19 pandemic.
A surge in jet fuel prices from $85-$90 to $150-$200 per barrel amid the U.S.-Israeli war on Iran has blindsided the aviation industry, where fuel accounts for up to a quarter of operating expenses, has forced airlines to raise fares and revise their financial outlooks as well as transfer cost pressures to their customers.
American Airlines Group (BMV:AAL) slashed its 2026 profit forecast, pushing the lower end of expectations to a loss, and said it expected its jet fuel bill to increase by more than $4 billion this year. It has already hiked checked baggage fees by $10 each for the first and second bags and by $150 for the third bag on domestic and short-haul international flights, and trimmed certain benefits for economy passengers.
Delta Air Lines Inc (NYSE: DAL) also said it would cut capacity by around 3.5 percentage points from its original plan and raise fees for checked bags in an attempt to offset soaring jet fuel costs, with an increase of $10 on first and second checked bags and a $50 increase on the third.
The U.S. airline pulled all planned capacity growth for the current quarter and forecast profit below Wall Street expectations.
Deutsche Lufthansa AG (ETR:LHAG), the German airline group previously said it would face a 1.7 billion euro hit from jet fuel prices in 2026. Its subsidiary ITA Airways said it would raise ticket prices between 5% and 10% in 2026 to compensate for the rising fuel costs. In April, the group unveiled a new "Economy Basic" low-cost fare option for short- and medium-haul flights, which will limit free carry-on bags to only a "laptop bag or a small backpack".