Flying has gotten a lot more expensive this year, and the big airlines are not apologizing. A fuel shock that started in the spring pushed carriers to raise fares, trim flights and lean harder on first class, premium economy and credit card deals. So far, travelers have kept paying.
That shift matters for anyone who owns airline stocks or plans to fly this holiday season. Delta reports third-quarter results on Friday, Oct. 9, and United follows on Oct. 20. Those reports will show whether higher fares are a lasting reset or a temporary fix that fades when fuel prices ease.
- Bureau of Labor Statistics: airline fares in August were 23.4% higher than a year earlier, versus 2.4% for core consumer prices.
- Delta: premium ticket revenue grew 17% to $6.92 billion in the second quarter, edging past main cabin revenue of $6.85 billion.
- United: the airline recovered about half of its higher fuel bill through pricing in the second quarter and expects to recover 80% to 90% in the third quarter and 100% by the fourth.
Fares are doing the heavy lifting
The government's airfare index has climbed every month since November 2025 on a seasonally adjusted basis. By August, fares were 23.4% above a year earlier. Few other items in the inflation report come close.
Three forces are behind it. Jet fuel jumped after the Iran conflict squeezed oil supply, Spirit Airlines stopped flying on May 2, and the large carriers have kept a tight lid on how many seats they add. Delta grew revenue 14% in the second quarter on only about 1% more capacity.
Airlines are also cutting their weakest routes. At an investor conference in mid-September, American said fuel had added about $1 billion to its fourth-quarter costs and that it was trimming some December flights. Southwest said it had cut its planned capacity growth in half, and United said it would fly fewer flights in December.
Premium seats now outsell coach
The biggest structural change is at the front of the plane. In the second quarter, Delta's premium ticket revenue rose 17% to $6.92 billion, while main cabin revenue rose 8% to $6.85 billion. Premium products and other non-coach revenue made up 61% of Delta's adjusted revenue, up from 59% a year earlier.
United shows the same pattern. Its premium revenue grew 16%, and unit revenue in its Polaris business class and Premium Plus cabins rose 13.6%. Delta said premium sales to corporate customers grew more than 25%.
Airlines are adding these seats fast. Reuters, citing industry data, reported that U.S. domestic premium seat capacity in June was 27% above 2019 and growing nearly three times faster than economy seats. That is a bet that higher-income travelers, including many retirees with savings, will keep paying up for comfort.
The credit card engine
A quieter profit source is the airline credit card. American Express paid Delta $2.4 billion in the second quarter, up 16%, and Delta's loyalty revenue rose 19%. Cardholder spending has grown at a double-digit pace for seven straight quarters.
United reported a record number of new co-branded card accounts, up 22%, with card spending up 14%. This money does not depend on the price of jet fuel. That makes loyalty income a steadier base when flying costs swing.
Fuel is still the swing factor
The fare gains have not fully covered fuel yet. Delta paid an average of $3.93 a gallon in the second quarter, up 75%, and adjusted earnings fell to $1.56 a share from $2.12. Its chief financial officer said Delta recovered about 60% of the fuel increase in that quarter.
United paid $4.19 a gallon and recovered about half. Both airlines built their third-quarter outlooks on fuel assumptions set in July: about $3.15 a gallon for Delta and about $3.69 for United. Fortune reported that jet fuel had climbed to about $4.71 by mid-September, more than double a year earlier.
That gap is the main earnings risk.
Delta guided to third-quarter earnings of $2.00 to $2.50 a share on revenue up in the mid-teens, and it kept its full-year target of $6.50 to $7.50. United guided to $2.50 to $3.50. Fuel costs above plan could push results toward the low end even if fares keep rising.
The squeeze is hardest on budget carriers
Low-fare airlines have less room to absorb higher costs. They sell mostly basic seats, have smaller loyalty programs and depend on price-sensitive leisure travelers. Spirit's shutdown removed one of the largest discount carriers from the market.
Frontier posted record second-quarter revenue of about $1.3 billion but still reported a net loss of $90 million. It told investors it expects unit revenue to rise more than 20% in the third quarter as it moves into former Spirit markets. The gap between the premium-heavy network carriers and the budget airlines has widened this year.
What it means for travelers
Bargain fares are likely to stay scarce through the holidays. United said about 35% of its fourth-quarter tickets were already sold by mid-September, and carriers are pulling marginal flights. Booking earlier and staying flexible on dates may help more than waiting for a sale.
Miles and points are worth a fresh look. With cash fares this high, an award ticket can stretch further than it did a year ago. Checked bag fees have also gone up at most carriers, so co-branded card perks such as a free bag may be worth more than before.
What investors should watch
When Delta reports on Oct. 9, look first at the fuel recovery rate: how much of the higher fuel bill came back through fares. Then compare premium revenue growth with main cabin growth. If premium and loyalty again outgrow the rest of the business, the pricing gains look more durable.
Next, watch non-fuel unit costs. Delta's rose 6.8% and United's rose 6.1% in the second quarter, well above both airlines' long-term targets of low single digits. Fourth-quarter guidance and any comments on 2027 capacity will matter as much as the quarter itself.
The key risk is the reverse trip. If fuel falls and airlines rush to add flights again, fares could give back gains quickly. Rapid growth in premium seats is another risk if corporate or retiree demand cools.
For now, the big carriers have shown real pricing power in a tough year. This article is general information, not personalized financial advice.
