Airlines Are ‘Eating the Cost’ of Sky-High Jet Fuel From Iran War, A4A CEO Says — Here’s What Flyers Can Expect Next

Shomik Sen Bhattacharjee

Tue, September 1, 2026 at 5:31 PM GMT+3 4 min read

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Airlines for America CEO Chris Sununu said U.S. carriers are "eating the cost" of expensive jet fuel rather than passing the full burden to travelers, predicting airfares will largely stabilize despite the six-month U.S.-Iran war.

Sununu Sees Airfares Stabilizing Despite Fuel Costs

"I don't think you're going to see prices go up significantly," Sununu told host Chris Stirewalt in an interview with "The Hill Sunday" on NewsNation. "I think they're going to be kind of stabilized for quite a while because we're not getting out of this Iran thing anytime soon, unfortunately."

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Sununu, who leads the consortium that represents the likes of American Airlines Group Inc., United Airlines Holdings Inc. and more, said domestic fares have risen about 20%, but added, "I don't think it's going up anymore."

Federal data show travelers have already absorbed substantial increases. The Bureau of Labor Statistics said airline fares jumped 25.5% year over year in July and 2.2% from June.

Jet fuel remains the central pressure point. The Argus U.S. Jet Fuel Index, published by Airlines for America, stood at $3.82 per gallon on Aug. 28.

Government figures show some relief from the spring peak. U.S. airlines paid an average $3.59 per gallon in June, down from $4.09 in May but still 62.1% above June 2025, according to the Bureau of Transportation Statistics. Total June fuel spending reached $5.99 billion, up 60.6% from a year earlier.

Airlines Absorb More Of The Fuel Shock

"So that is up 20 percent, but it really should almost double if they passed all the cost to the consumers," Sununu said of fares. "They're not doing that. So they're staying competitive."

Higher fuel bills have already squeezed carrier profits. American Airlines said second-quarter fuel expense surged 83.3% to $4.88 billion while higher fares offset nearly half of the increase. The industry shock also contributed to Spirit Airlines' collapse this spring.

Sununu nevertheless emphasized resilient travel demand. "Demand is strong. People are traveling," he said. "And that puts money in the economy in a whole lot of different ways."

United Airlines CEO Scott Kirby similarly told Reuters last week that he expects fare increases in early 2027 to be gradual and smaller than this year's jumps as demand remains strong.

Iran War Keeps Energy Risks Elevated

The Iran conflict remains the wild card. The Energy Information Administration estimates oil flows through the Strait of Hormuz collapsed to 4.9 million barrels per day in the second quarter from 21.6 million before the war, keeping pressure on global energy markets.

Photo courtesy: Shutterstock

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