Why home air journey prices are growing at a sooner price that worldwide flights

According to data from airfare search engine Skiplagged, domestic flight price growth has increased 23.2% from March 2025 to this month, while international flight costs have increased 11.5% in the same time period. This summer marks the highest domestic passenger prices for the season since 2022.

Compared to international flights, which consume 15,000 to 30,000 gallons of fuel—about 1,500 to 3,000 per hour as a result of larger aircraft and long-haul routes—domestic flights use about 1,800 to 2,7000 gallons per trip, or about 750 to 900 gallons per hour.

Jet fuel costs nearly doubled during the Iran war, with supplies dwindling in some parts of the world as a result of halted traffic at the Strait of Hormuz, the chokepoint through which 20% of global oil usually flows. Rising fuel costs caused panic in the airline industry: Willie Walsh, the outgoing director general of the International Air Transport Association (IATA), warned this month the global airline industry’s profits would be cut in half as a result of tepid demand, culminating in the worst financial year for aviation since the pandemic.

The anxieties, however, did not meaningfully materialize. Instead, the rising airfare costs indicate high demand for summer travel, combined with airlines successfully making a series of moves that effectively protected them from supply chain uncertainty from the war, such as leaning into premiumization and slashing certain routes. 

“It’s kind of a glass half full kind of scenario, where I think the outcome was not as bad as many predicted,” Christopher Anderson, a Cornell University professor of services management who studies the airline industry, told Fortune. “Because it wasn’t as bad, and the capacity is not there…we’re seeing elevated prices.”

The resilience is good news for the airline industry—but the pattern of increased prices ahead of a busy summer travel season also exposes the large portion of the American population who is now facing high travel costs, even to fly within the country. It’s yet another example of the K-shaped economy in action, where the wealthy can splurge on expensive airfare while most other households weigh tough travel decisions.

“Here in the U.S., we have a very bifurcated economy,” Anderson said. “And a lot of this turmoil that we’re seeing is the effects more on one segment of that economy than the other.”

What’s behind the domestic travel cost paradox?

Unlike increased road travel costs, which Americans experience in real time when they refuel their cars, air travel is only partially determined by the cost of jet fuel. Airline customers may be paying higher prices because of elevated fuel costs now, despite their travel being weeks or months in the future. Moreover, airlines are constantly managing routes and prices to respond to competitors. Part of this is a result of the Iran war. American Airlines announced this month it would suspect six “select routes” within the U.S. during August and September amid higher fuel costs, but part of it is the cost of doing business.

“I would absolutely say we’ve seen a dramatic increase in fuel prices, but without a doubt the entirety of that fuel cost has not been passed on to consumers,” Anderson said. “There’s obviously a correlation between airfares and fuel prices, but it’s not as strong as one might think.”

While some fare increases can be explained with higher costs, Anderson argued much of it can be explained by decisions airlines like American have made to cut capacity and focus on profits. However, resilient summer travel has meant higher demand for fewer flights, enabling airlines to keep prices higher. American Airlines expects similar profits this year as in 2025, when fuel prices were much lower.

“People still want to travel, and travel is still a bargain,” American CEO Robert Isom, told Bloomberg TV last month.

After Spirit Airlines ended operations earlier this year, carriers saw an influx in the budget airline’s customers, further incentivizing them to keep fares higher, but airlines aren’t just getting more customers from budget airlines. The premiumization of the flying experience encourages travelers to upgrade their experiences. And not only are premium seats more expensive than regular economy tickets, but they tend to increase in price more than their more affordable alternatives.

“[Airlines] have a lot more pricing power, and so they definitely do recover those higher fuel prices in some of the more non-entry level cabin assortments,” Anderson said.

Conversely, international travel costs have increased more modestly over this time because there hasn’t been the same changes in demand. There are often fewer international flights to begin with, meaning airlines don’t need to make as many changes to capacity in order to have full flights.

What can consumers expect of air travel costs?

Even with the Strait of Hormuz reopening and oil prices falling, airfare is expected to remain sky-high. Jet fuel is hovering around $2.87 per gallon, down from an April high of nearly $5, but according to Deutsche Bank Securities, airlines raised prices as recently as two weeks ago.

Part of the persistently high airfare is due to sustained demand, but part of it is also that it takes airlines time to add capacity back, Anderson said. Still, he doesn’t expect ticket costs to be lower in a few months for Americans who delayed making travel plans banking on cheaper prices. There’s a chance budget airlines like Frontier expand their own capacity in the wake of Spirit Airlines’ exit—but more likely, airfare will move in the same direction as the aircraft: up.

“As someone looking for air travel, you can expect prices to be high and stay high for the near term,” Anderson said. “It’s not like air travel is going to get insanely inexpensive anytime soon.”