American Airlines Stay Calm While Fuel Costs Soar

The war in the Middle East has pushed jet fuel prices to almost double, yet many U. S. airlines keep their eyes on the prize. At a recent industry meeting, United’s boss said the company could cover the extra fuel bill and even raise fares a bit. He pointed out that bookings in the past week were up 15‑20 percent, and United has cut some low‑profit routes to keep the schedule lean. Delta Air Lines says it can shrink capacity if fuel stays high, while American and Delta have nudged up their earnings forecasts. Southwest also expects to grow its margins next year. These moves come after a strange dip in travel last year when new tariffs caused airlines to pull back on guidance. The U. S. market was already tight before fuel costs jumped, so the carriers feel they can raise prices without sparking a price war. The plan for 2026 is to add about 3 percent more seats, but ultra‑low‑cost carriers will cut capacity by roughly 10 percent. That means the cheapest seats vanish, leaving room for the big airlines to hike fares without losing customers.In Europe and Asia, the mood is more cautious. Lufthansa says its 2026 outlook is unclear because of uncertainty. Wizz Air in Hungary warns the conflict will hurt profits, and Air New Zealand has trimmed flights for a few months. These airlines face more than fuel hikes; they must deal with airspace closures, reroutes and shaky demand. Some have already seen higher costs from detours. Analysts back the U. S. view that demand can absorb a small price lift of 5‑7 percent. They note the airlines have already raised fares twice by about $10 each way, and that business travelers and loyalty members keep flying even when tickets rise. Some passengers are booking early to avoid higher prices, but U. S. executives say overall demand is normal for March. Delta’s chief says the American economy remains strong for its core customers, which helps keep bookings steady even when the war rattles the region. Delta reports only a slight drop in Europe‑origin flights, while U. S. demand for Europe stays robust. The big carriers are confident because they rely on premium and corporate travelers who cut back less when fares climb. If the conflict drags on, however, higher energy costs could squeeze households and businesses, testing that confidence.