U.S. airlines spent $6.66 billion on jet fuel in May, marking the second consecutive month that monthly fuel costs exceeded $6 billion. The figure represents an 84 percent increase compared to May 2025, when airlines paid just $3.62 billion for fuel. The dramatic year-over-year spike reflects the ongoing impact of Middle East tensions that have disrupted global energy supplies and sent fuel prices soaring since February.
The surge in costs is being driven almost entirely by price increases rather than higher consumption. U.S. carriers used 1.627 billion gallons of fuel in May, actually down 0.6 percent from a year earlier. The average price airlines paid per gallon reached $4.09 in May, up 85 percent from $2.21 in May 2025. April fuel costs were even higher at $6.47 billion, underscoring the sustained pressure on airline finances throughout the spring and early summer.
The escalating fuel bills stem from geopolitical disruptions originating in late February when the U.S. and Israel launched airstrikes against Iran. The Strait of Hormuz, a critical maritime passage through which roughly one-fifth of the world’s petroleum flows, has been effectively closed since the conflict began. This chokepoint closure disrupted global crude oil supplies and created supply constraints that pushed jet fuel prices to historic highs, with prices hitting over $100 per barrel in March and peaking even higher in April.
Fuel costs now represent a crisis-level burden for the airline industry. The International Air Transport Association estimated that global airlines would face a $100 billion increase to their collective fuel bill in 2026, with jet fuel prices averaging approximately 70 percent higher than 2025 levels. The surge has become so severe that it is reshaping the industry’s financial landscape, with overall airline profitability expected to be cut in half this year compared to 2025, dropping from $45 billion to approximately $23 billion.
Airlines have responded to the unprecedented fuel costs through multiple strategies. Many carriers have raised ticket prices significantly, with domestic fares increasing by approximately 18 percent for the summer compared to last year. Airlines are also imposing higher baggage fees and adding or increasing fuel surcharges on international flights. Some carriers have cut flight schedules and reduced capacity to minimize fuel consumption on less profitable routes.
The financial impact has cascaded across the industry with particular severity for weaker carriers. Spirit Airlines, already struggling through bankruptcy, ultimately ceased operations in early May after determining that dramatically higher fuel prices made its restructuring plan untenable. The airline had projected fuel costs averaging about $2.24 per gallon for 2026, but actual market prices moved far higher, creating unsustainable financial pressures.
Major international carriers have also adjusted their financial guidance downward in response to fuel costs. American Airlines projected fuel prices could add more than $4 billion to its expenses if current pricing holds. Delta Air Lines projected an all-in fuel price of approximately $4.30 per gallon for the second quarter and warned that fuel expenses would rise by more than $2 billion. Air France-KLM updated its 2026 fuel bill projections to $9.3 billion, up $2.4 billion from earlier estimates.
Fuel prices eased slightly from their spring peaks after the U.S. and Iran reached an interim ceasefire agreement in June, offering some relief to the industry. However, the situation remains fragile. In early July, three tankers were struck by projectiles in the Strait of Hormuz, and the U.S. revoked a license that had previously allowed Iranian oil sales under the ceasefire agreement, raising renewed concerns about supply disruptions.
Airlines worldwide have begun hedging fuel costs to protect against further price volatility. Some carriers have successfully hedged significant portions of their fuel needs at lower prices locked in months ago. Ryanair, for instance, hedged 80 percent of its fuel needs through April 2027 at approximately $67 per barrel, allowing it to weather current prices better than competitors without similar protections.
Looking ahead, the airline industry faces continued uncertainty. Many carriers are assuming that oil prices will remain elevated through the end of 2027, with some projecting prices staying above $100 per barrel for the next 18 months. The forecast for when the Strait of Hormuz will fully reopen remains murky, with some analysts suggesting it could take six to eight months or longer if a peace agreement is reached.
Despite the financial pressures, travel demand has remained surprisingly resilient. Airlines have successfully passed fuel costs on to passengers through higher fares, and most carriers have maintained reasonable load factors. However, analysts warn that the sustainability of this situation depends on how long consumers will tolerate elevated ticket prices. Market research shows that 86 percent of travelers expect airfares to reflect oil prices, but economic sensitivity could emerge if fares climb too steeply relative to wages and consumer spending.