US Airlines Stay Confident Despite Middle East Conflict Impact on Fuel Costs

American airline executives are expressing optimism about ticket prices and passenger demand despite fuel costs nearly doubling due to the Middle East conflict. While overseas carriers face operational disruptions and schedule changes, major US airlines report strong revenue and plan to offset higher fuel expenses through fare increases.

CHICAGO, March 20 – American airline executives are expressing optimism about ticket prices and passenger demand even as the Middle East conflict drives up fuel costs and creates challenges for international carriers worldwide.

The major US airlines, which don’t protect themselves against oil price fluctuations, are seeing the war’s impact primarily through their fuel expenses. Jet fuel costs have nearly doubled since fighting began in late February.

International airlines in Europe and Asia face additional complications beyond higher fuel bills, including disrupted flight schedules, operational challenges, and uncertain business forecasts as they implement surcharges and raise ticket prices.

At this week’s industry conference, leading US carriers highlighted steady passenger demand. United Airlines CEO Scott Kirby described the revenue climate as “really strong.”

“We have a goal this year to fully offset the increase in fuel prices,” Kirby stated on Tuesday. He noted that fare bookings over the previous week had jumped 15% to 20%, and airlines could currently recover “100%” of fuel price increases.

United has also eliminated less profitable routes, including certain midweek, Saturday, and overnight flights. Kirby explained the airline prefers leaving some passenger demand unserved rather than operating money-losing routes if fuel remains expensive.

Delta Air Lines similarly indicated it could reduce flight capacity if fuel prices remain high.

Both American Airlines and Delta upgraded their quarterly revenue projections this week, even though each company expects roughly $400 million in first-quarter losses from increased fuel costs. Southwest Airlines predicted significant margin growth for the year.

However, the robust US demand appears stronger partly because of unusually weak comparison numbers from last year, when travel demand suddenly collapsed and reservations dropped after President Donald Trump announced extensive tariffs, causing most airlines to withdraw their financial guidance.

The confidence also stems from how constrained the US market was before fuel prices spiked. Budget carriers had already been cutting routes, parking planes, and reducing expansion plans following an extended period of poor profitability.

US airlines intend to increase seating capacity by 2.8% in the second quarter of 2026, but this figure includes a 10% capacity reduction by ultra-low-cost carriers, according to TD Cowen. This removes some of the market’s cheapest seats and allows major airlines more flexibility to increase prices without sparking widespread fare competition.

International carriers are taking a more cautious approach across Europe and Asia.

Germany’s Lufthansa stated its 2026 projections were uncertain due to geopolitical tensions. Hungary’s Wizz Air cautioned that the Middle East conflict would reduce net profits in fiscal 2026. Air New Zealand paused its annual earnings forecast and announced it would eliminate approximately 5% of flights through early May.

For these international carriers, the conflict creates operational challenges beyond fuel costs. Their flight networks operate closer to the war zone, making them more vulnerable to airspace restrictions, route changes, and demand fluctuations, though Asia-Europe fares have temporarily increased due to reduced Gulf region capacity.

Air France-KLM has warned of increased expenses and complications from route changes. British Airways has extended its temporary Middle East flight reductions. Scandinavian airline SAS announced it would cancel 1,000 flights in April.

Industry analysts generally support the more optimistic US perspective. Melius Research reported that carriers had already implemented two fare increases of approximately $10 per direction and that market conditions could sustain an additional 5% to 7% increase.

TD Cowen raised its 2026 profit estimates for the six largest US carriers on Wednesday, citing strong demand and better-than-expected success in raising fares to cover higher fuel expenses.

While some passengers rushed to book flights earlier than usual to avoid higher prices, US airline executives said reservation patterns remained mostly typical during the March quarter.

Delta executives characterized the demand strength as normalization and recovery rather than panic-driven purchasing. This confidence could face challenges if the conflict continues and rising energy costs begin affecting household budgets and business expenditures.

Currently, demand has remained stronger at large US carriers partly because they depend more heavily on premium passengers, corporate clients, and loyalty program members, who typically reduce travel more slowly when fares increase.

Delta CEO Ed Bastian said the US economy has stayed healthy among high-income consumers, whom he identified as Delta’s primary customer base, helping maintain demand despite uncertainty.

Delta reported only a slight decrease in Europe-origin bookings since the war started, while US demand for European travel remained solid. “When you got a war in your backyard, people tend to stay home,” Bastian explained.