A JetBlue plane lands below the DC skyline, with the U.S. Capitol building, near United Airlines, American Airlines and Delta Airlines planes on the tarmac at Ronald Reagan Washington National Airport in Arlington, Virginia, United States, January 25, 2025.
Jim Urquhart | Reuters
A U.S. lawmaker has urged the CEOs of the nation’s largest airlines to lower prices if and when the cost of jet fuel falls after a massive hike this year that prompted carriers to raise surcharges, baggage fees and fares.
“If airline prices are truly tied to global fuel costs, then they must be truly responsive when those costs decline,” U.S. Rep. Ritchie Torres, D-N.Y., wrote to CEOs of Delta Airlines, United Airlines, JetBlue Airways And Southwest Airlinesaccording to a letter seen by CNBC. “I call on you to publicly commit to reducing costs associated with air transportation if jet fuel prices fall. The American people deserve fairness and pricing models that reflect not only market conditions, but economic justice.”
Fuel is the largest airline expense after labor. Jet fuel reached an average of $4.88 per gallon in New York, Houston, Chicago and Los Angeles on April 2, according to Argus, up about 95% since the start of the Feb. 28 attacks by the United States and Israel on Iran. The rise was greater in other regions that don’t produce as much oil or jet fuel as the United States.
United declined to comment. Other carriers did not immediately respond to requests for comment.
Delta reported a $2 billion fuel headwind this quarter and said it would “significantly” reduce its capacity plans, something other carriers will likely discuss when they report results next week.
Lower capacity can drive up rates, especially if demand remains robust. At the same time, lower fuel prices may encourage airlines to increase capacity, which works against pricing.
When asked what would happen if fuel prices fell from recent highs, Delta CEO Ed Bastian said last week that “fuel recovery will be important.” No matter what we do, and the extent to which we can maintain the pricing strength that we’ve been talking about through industry rationalization, it will certainly help us increase our margins this year and clearly next year as well.
Delta, United, Southwest, JetBlue, American airlines And Alaska Airlines have all increased baggage fees since the attacks began, while airlines around the world have posted higher airfares and surcharges.
Consumers willing to pay more to travel have been driving the airline industry. Bastian told analysts last week that demand had held up.
“I think the high-end consumer, the high-end consumer, is frankly immune or becoming increasingly immune to the headlines and is not delaying their investment in the experience economy, waiting to see what the next headline is, on the sidelines,” he said.