‘Double Whammy’: Holiday Travelers Face Higher Fares And Fewer Flights As Jet Fuel Costs Soar

United Airlines and American Airlines are cutting some flights from their December schedules as jet fuel costs climb, executives at both carriers told investors.

Travelers whose flights are cut are often “quietly funneled toward travel credits or vouchers rather than the cash refunds they are entitled to by law,” John Breyault, vice president of public policy at the National Consumers League (NCL), told the Daily Caller News Foundation.

“Consumers are catching a double whammy heading into the holiday season,” Breyault added, pointing to higher base fares as carriers try to offset fuel costs.

Republican Texas Rep. Troy Nehls, chairman of the House Transportation and Infrastructure Subcommittee on Aviation, does not have a hearing scheduled on the cuts, a spokesperson for the congressman told the DCNF.

If schedule reductions “become widespread or materially affect connectivity, competition, or consumers,” the office would expect the subcommittee to “seek additional information from airlines and other stakeholders to determine whether further congressional oversight is warranted,” the spokesperson added.

“There’s some marginal routes that don’t make sense in a higher fuel environment, so we cut them,” United Chief Financial Officer Michael Leskinen said at a Morgan Stanley investor conference on Sept. 16.

“As you look into the fourth quarter, there’ll be some flights in December that we won’t fly that we thought we were going to fly,” Leskinen said.

United will make further adjustments in the first quarter and into 2027 if fuel remains high, he added.

Rising fuel prices added about $1 billion to American’s projected fourth-quarter costs, Chief Financial Officer Devon May said at the same conference.

The airline will “touch up December because of that” and probably grow a little less in 2027 than it had expected, May noted.

“You’re just going to want to pull a little capacity out when we see a rise in fuel like we’re seeing right now,” he said.

Delta Air Lines, Frontier Airlines, Alaska Airlines and JetBlue did not respond to the DCNF’s requests for comment. The Department of Transportation (DOT) asked for more time and did not provide a comment on the record.

American CEO Robert Isom said at the conference that the airline has recaptured “a tremendous amount” of its higher fuel expense, in remarks the company’s spokeswoman sent to the DCNF.

“If fuel prices remain as high as they are right now, I think that that’s going to require some adjustments in terms of our capacity planning as we take a look out into the future,” Isom added.

Isom said the markup of jet fuel over crude oil “has grown by 3x, and I really haven’t seen that in my career also.”

American also cut flights over fuel costs in 2008. In May of that year, the company announced it would reduce its domestic flying in the fourth quarter by 11% to 12% from a year earlier, citing “unprecedented fuel prices and growing concerns about the economy,” according to its filing with the Securities and Exchange Commission.

The company also planned to retire 30 McDonnell Douglas MD-80s and 10 Airbus A300s that year, the filing shows.

Southwest Airlines meanwhile has made “very minimal” schedule adjustments because it entered the year planning modest growth, a company spokesperson told the DCNF.

Southwest has cut its planned 2026 capacity growth of 2% to 3% by about half, the spokesperson said.

Southwest Chief Financial Officer Tom Doxey “was making an illustrative point and not alluding to an action we’ve taken” when he noted at the conference that trimming capacity would be a natural response if fuel stays high for longer, the spokesperson added.

“When fuel prices rise, we don’t pass the cost on to customers,” Allegiant Air’s media relations team told the DCNF.

The airline instead makes “market adjustments during off-peak travel periods,” which lets it keep scheduled service during peak holidays and traditional vacation times, the team added.

Carriers facing higher fuel costs do not always raise fares and can instead reduce frequencies on some routes, retire or ground older, less efficient aircraft or temporarily drop their least profitable service, an industry official told the DCNF.

Jet fuel has cost substantially more in Europe and Latin America than in the U.S., the official noted.

Airlines are paying high prices for jet fuel, but “there are currently no dangers of supply shortages,” Tom Kloza, chief energy adviser at Gulf Oil, told the DCNF. “Jet fuel production is easy to accelerate.”

Refiners typically turn 8% of each barrel of crude into jet fuel but can easily raise that yield to 11% or 12%, “which actually amounts to a 50% increase in production,” he said.

Refiners have been making the most diesel they can because profit margins on it are “north of $100/barrel,” Kloza noted.

“Airports are responsible for ensuring that an adequate supply of aviation fuel is available and that fuel shortages do not disrupt operations,” the Federal Aviation Administration told the DCNF.

The agency issues notices to airmen when aviation fuel is unavailable at an airport, it added.

Airports Council International-North America told the DCNF that “airports don’t get to set flight schedules.”

About 35% of the carrier’s fourth-quarter tickets are already booked, “so you can’t go back and reprice those tickets, so there’s a lag,” said Leskinen, United’s chief financial officer.

“Jet fuel price gets passed through with a lag. Period,” Leskinen said, adding that fourth-quarter bookings show “very little evidence” of travelers cutting back.

United’s media relations team told the DCNF it had nothing to add beyond Leskinen’s remarks.

“Airlines have a responsibility to make prudent business decisions and scheduling decisions based on operational and market conditions,” Rep. Nehls’ spokesperson stated.

“Airlines have a long-standing pattern of using vouchers as an interest-free loan funded by consumers,” Breyault of the NCL said.

The DOT should investigate carriers that sell seats on flights “they know they intend to cut down the line to manage fuel capacity,” he said, adding that notices to affected travelers should put the cash refund option at the top instead of burying it under “accept voucher” buttons.

Travelers who have booked holiday flights should check their reservations now for schedule or flight number changes, Breyault advised.

Those whose flights are canceled or significantly changed should not accept a travel credit “unless you actually want it,” because “you are legally entitled to your money back in full,” he added.

Under the DOT’s automatic refund rule, passengers whose domestic flights are canceled or moved by more than three hours and who decline the airline’s alternative are entitled to a full cash refund, according to the department.