Despite a 21% jump in US domestic economy fares — lifting the average to roughly $570 — travellers are still buying seats, with travel‑agency ticket sales hitting $10.4 billion in March. Premium fares have climbed about 17% to near $1,444, and airlines say higher jet‑fuel costs and capacity cuts are driving much of the price rise.

Price surge and demand

Data from the Airlines Reporting Corp shows domestic economy tickets increased about 21% year-on-year to an average of roughly $570 per trip, while premium-seat fares rose about 17% to an average near $1,444.

  • Travel-agency ticket sales rose 12% in March from a year earlier, reaching $10.4 billion.
  • The number of domestic trips was up about 5%, and international trips roughly 1%.
  • Airlines report bookings have remained resilient despite higher fares.

"Bookings have remained resilient amid these changes, which is an encouraging sign," said Joanna Geraghty, CEO of JetBlue Airways, on the carrier's recent earnings call. She described the booking pattern as a positive signal for peak demand over the northern summer months.

Fuel costs and geopolitical shock

Executives point to jet fuel as the chief driver of rising fares. Fuel prices rose after recent attacks in the Middle East that disrupted oil markets and shipping in a key export region. Airlines say the resulting higher fuel bills have added billions to carriers' costs so far this year.

Mastheads

That higher bill is rippling through pricing decisions as carriers raise fares and adjust capacity to protect margins.

Capacity moves and fare mix

  • Carriers have trimmed capacity to conserve cash and support yields; reducing seats tends to raise average fares when demand stays steady.
  • There is an industry tilt toward premium cabins, where a single booking can bring several times the revenue of an economy ticket.

American Airlines CEO Robert Isom told investors the carrier has been "really sharp for managing our load factors," noting load growth is keeping pace with limited capacity additions and benefiting yields.

Winners and losers

Major network carriers, which sell a higher share of premium seats, appear to be benefiting. Delta and United have signalled optimism about fare growth, leaning on premium-seat demand to lift revenue per passenger. JetBlue forecast second-quarter revenue could rise as much as 11% from a year earlier.

Low-cost, domestic-focused carriers are under more pressure because they sell fewer premium seats and depend more on lower-yield economy fares; some smaller carriers have signalled strain as fuel costs bite.

Revenue outlook and recovery timeline

Several major carriers are telling investors they expect higher fares and a shift in seat mix to cover increased fuel costs by late 2026 or early 2027, implying the industry will rely on improved yields and premium demand to recover margins into that period.

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Several carriers say they expect higher fares and a shift toward premium seats to cover increased fuel bills by late 2026 or early 2027; JetBlue forecasts second‑quarter revenue could rise as much as 11% year‑on‑year.

This article was created with AI assistance.