US Airlines’ May Fuel Bill Climbs on Higher Jet Prices

US airlines nearly doubled their fuel spending in May 2026 as higher jet fuel prices continued to reshape carrier finances, investment strategies, and pricing decisions across the aviation industry. While fuel consumption remained largely stable compared with a year earlier, carriers spent US$6.6 billion on fuel, highlighting how rising energy costs have become one of the industry's primary financial challenges.

According to the US Department of Transportation's Bureau of Transportation Statistics (BTS), US scheduled airlines spent US$6.6 billion on fuel in May 2026, up 3% from April and 83.9% from the US$3.6 billion recorded a year earlier. The May figure also exceeded April's US$6.4 billion, reflecting continued cost pressures despite a slight monthly decline in fuel prices.

Fuel consumption reached 1.6 billion gallons in May, a 3.5% increase from April's 1.5 billion gallons. However, consumption remained 0.6% below May 2025 levels, indicating that the increase in fuel expenditures was driven primarily by higher prices rather than increased flying activity.

Airlines paid an average of US$4.09 per gallon in May, down 0.5% from April's US$4.1. Compared with US$2.2 per gallon in May 2025, fuel prices rose 85% year over year, increasing by US$1.8 per gallon.

The BTS said reported fuel expenditures may reflect the effects of fuel hedging strategies and other contractual arrangements designed to reduce exposure to price volatility. The agency also noted that expenditure figures are reported in current dollars, are not seasonally adjusted, and reflect only fuel purchased directly by airlines.

Following the integration of Alaska Airlines and Hawaiian Airlines, the BTS now reports fuel data under Alaska Airlines, requiring caution when comparing carrier-level statistics with previous reporting periods.

The increase in fuel costs comes as passenger traffic has softened in some international markets. According to the National Travel and Tourism Office (NTTO), international passenger enplanements to and from the United States totaled 22.7 million in May, down 1.2% year over year, although traffic remained 103.3% of May 2019 levels. Non-US citizen arrivals declined 4.5% to 4.5 million, while overseas visitor arrivals fell 6.5% to 2.8 million.

Higher fuel prices have also widened financial differences among US airlines, according to executives speaking during the International Air Transport Association (IATA) Annual General Meeting in Rio de Janeiro.

United Airlines CEO Scott Kirby said financially stronger carriers continue investing in products and technology despite rising operating costs. "Air travel is not a commodity," Kirby said. "Customers care about technology, service, reliability, and the overall product. They want a great experience. They do not just want a seat."

Kirby said United expects to recover the full impact of higher fuel costs through fare increases by the end of the year. "We are on a path to recovering 100% by the end of the year," he said.

Southwest Airlines Chief Operating Officer Andrew Watterson said higher borrowing costs are adding another layer of financial pressure. "If you need to borrow money, interest expense is going up," Watterson said. "The higher your costs, the lower your growth rate and the lower your investment in products." He said Southwest continues evaluating investments in airport lounges, premium seating, and potential transoceanic routes.

The pressure has been greatest for airlines with weaker margins and limited premium revenue. Following the collapse of Spirit Airlines and S&P Global Ratings' downgrade of JetBlue Airways deeper into speculative-grade territory, executives acknowledged that higher fuel costs have intensified pressure on smaller carriers.

JetBlue CEO Joanna Geraghty described the competitive environment in an internal memo reported by Reuters."The deck is stacked against smaller carriers like us," she said, citing the advantages larger airlines gain through broader networks, loyalty programs, and credit card partnerships.

Alaska Air Chief Financial Officer Shane Tackett said airlines with diversified revenue streams remain better positioned to absorb higher fuel costs. "There are some airlines whose business models are really challenged in the current environment," Tackett said.

He added that corporate bookings for travel over the next 90 days are running 20% to 30% above year-earlier levels across most industries and regions. Tackett said fare increases should offset most fuel-related cost pressures during the second half of the year, potentially reducing Alaska's operating cash burn to breakeven or slightly positive territory.

Although jet fuel prices began declining following a temporary ceasefire between the United States and Iran, airlines have not indicated plans to broadly reduce fares. US jet fuel spot prices fell to US$2.85 per gallon on June 17 from an early April peak of US$4.88, a decline that Reuters estimated could reduce annual industry fuel costs by more than US$40 billion if sustained.

However, airlines continue prioritizing margin recovery. Deutsche Bank estimated US carriers are recovering only about US$0.60 in additional revenue for every US$1 increase in fuel costs, equivalent to US$14.4 billion in additional revenue against US$24.1 billion in higher fuel expenses. Alaska Air reported recovering about one-third of increased fuel costs, while Delta Air Lines, United Airlines, and American Airlines recovered 40% to 50% during the second quarter. 

The outlook remains challenging. IATA recently cut its 2026 global airline net profit forecast to US$23 billion from US$45 billion, citing higher operating expenses driven largely by fuel costs. While the association expects industry revenue to grow 9.5% this year, expenses are projected to increase 13.1%, outpacing revenue growth and reducing net profit margins to 2%.