Overview
- Jet fuel and crude fell sharply in mid-June after an interim U.S.-Iran peace agreement, with U.S. jet fuel spot around $2.85 per gallon on June 17.
- If the price decline endures, Reuters calculations show the U.S. industry could save more than $40 billion a year on fuel, but savings reach airlines over time through fuel purchases not immediately through spot moves.
- Most major carriers plan to keep fares elevated so they can recoup earlier losses and restore margins, a strategy supported by bank and analyst estimates that link lower fuel forecasts to meaningful earnings gains.
- Capacity constraints are tightening price pressure because U.S. domestic seats are set to grow only about 0.4% year‑on‑year in Q3 and aircraft delivery backlogs limit rapid expansion.
- One exception is AirAsia X, which cut fares by about 5% from June 15 and said it will review prices weekly as fuel eases while it restores capacity by August.