Airlines Have Found They Earn More From Fewer Passengers

The numbers behind this year’s airfares tell an odd story: people are flying less, and airlines are making more per seat. Fares rose nearly 23% in the seven months through September, compared with a 3.6% rise in overall consumer prices, according to a Reuters analysis. In the third quarter, Delta, United, American, Southwest and Alaska together added about $8.8 billion, or 18%, in passenger revenue, while traffic grew by less than 1%.

Demand is not exactly booming. TSA screened 2.9% fewer passengers in the quarter, with United the exception, reporting a passenger count up more than 2%. The cost side explains the strategy. Gulf Coast jet fuel went from $2.43 a gallon before the Middle East conflict began in February to $4.63 on October 20, and the four largest carriers spent $6.3 billion more on fuel in the quarter, roughly $69 million a day.

That is why carriers are choosing margin over full planes. United cut its adjusted 2026 earnings outlook to a top end near $7.22 a share, down from a range of $9 to $11, and expects fuel near $4.80 a gallon in the fourth quarter. Southwest trimmed full-year guidance to $2.60-$2.85, and American is the only one of the four majors now expecting a loss for 2026. Delta and Southwest also cut their forecasts.

For travelers, the holidays are the immediate pinch. Hopper data cited by CNN puts the average Thanksgiving ticket at $389, up 39%, and the Christmas-period average at $452, up 22%. With airlines still planning modest domestic capacity growth, in the low single digits for the fourth quarter and the first quarter of 2027, fares are unlikely to fall quickly. Booking early and staying flexible on dates remains the best defense.

Sources: CNBC, MarketScale