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If you looked at the cost of summer flights and decided to postpone your vacation until prices fall, you might be kicking yourself now. The price of jet fuel is down from its April peak, and a cheaper barrel is supposed to mean a cheaper seat, or at least in theory (1).
But Delta Air Lines just spent an earnings call explaining why it won’t (2) — and the reason isn’t fuel at all.
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On the airline’s earnings call on July 10, CEO Ed Bastian said that today’s higher fares aren’t tied to a temporary spike in fuel costs, nor will they fall when oil calms down. Instead, they reflect a broader reset in how airlines price tickets.
Fuel may have eased, but the cost of nearly everything else airlines buy hasn’t. At the same time, the lower-cost airlines that used to put negative pressure on fares have lost that leverage (3), and Delta has quietly rebuilt its pricing around all of it. So the current higher fares are the new baseline. Delta believes its “current revenue momentum should remain sustainable even if fuel prices moderate,” Bastian said (2).
For anyone hoping the end of the fuel spike would pull ticket prices back down, that’s the sentence to sit with.
What Bastian actually said
Delta had a very good quarter. Revenue hit a record $17.7 billion, a 14% jump (4). The airline booked $1.4 billion in pre-tax profit — even as it absorbed the highest quarterly fuel expense in its history, a $4.4-billion bill that ran 77% above a year earlier (4). Delta raised its dividend 15%, and earnings came in at $1.56 a share.
So, in other words, Delta made record money in the same quarter its fuel bill peaked.
That’s the case Bastian made to investors: The industry has learned to push fuel costs straight through to fares, and to do it quickly. “As we predicted, structural change has accelerated, enabling the industry to recapture this year’s fuel cost inflation at the fastest pace of any recent cycle,” he said (5).
The keyword there is “structural.” He’s spelling out a reset in how airlines price tickets — one he expects to hold.
Why fuel isn’t the story anymore
Here’s how that reset shows up in the numbers. By Bastian’s math, the discount carriers can’t really undercut anymore because they’re not even covering their own costs. The low end of the market “still has to increase fares by another 5% to break even, he said (2).
Cheap fuel used to be their big advantage. Now fuel is expensive, and labor, airports, technology and aircraft have all reset higher too, so there’s no room left to start a fare war. As Bastian put it, the opportunity now is in “finding ways to secure higher revenues, not higher market share (2).” When the discounters can’t discount, the floor under fares rises.
You can see that showing up in the data. Airfare inflation is running hot: prices climbed 26.7% over the year through May and another 2.7% in May itself, according to the U.S. Bureau of Labor Statistics (6) (BLS).
Airlines cast that as catch‑up rather than overcharging. Bastian pointed out that “even after recent fare increases, airfares remain 10 to 15 points below overall inflation since COVID,” which the industry uses to argue there’s still room to push prices higher (2).
The backdrop makes that argument feel more urgent: U.S. passenger airlines posted a $966 million net loss in the first quarter, according to U.S. Bureau of Transportation Statistics data (7).
And surging oil prices are only part of the picture. Reduced demand during the pandemic and even the war in Ukraine have hit the business hard.
“As a result, we expect average jet fuel prices to be 70% higher year-on-year,” Willie Walsh, the outgoing director general of the International Air Transport Association, said (8).
“That will add $100 billion to our collective fuel bill this year,” he added.
What this means for your money
If you’ve been waiting for cheaper fuel to show up as a cheaper ticket, Delta just told you the wait doesn’t really end. Fares used to fall when fuel got cheaper, but that link has been broken.
Fares could still drop when demand softens — when seats go empty on off‑peak weeks, shoulder‑season routes and those 6 a.m. flights nobody wants. But they may not drop just because crude gets a little cheaper.
So, what’s a traveller to do?
Look for deals
Higher ticket prices don't necessarily mean you have to spend a fortune to travel. While airlines may not be slashing fares just because fuel prices fall, bargains are still out there — if you know where to look. That makes deal-finding tools more valuable than ever.
Dollar Flight Club is designed to do exactly that. The platform can help you spot cheaper fares by searching for discounted routes and alerting you when prices drop.
Dollar Flight Club works directly with airlines and travel companies to secure discounts and flights that are otherwise not available to the public. Rather than manually searching dozens of booking sites every day, you can set your departure airport and a list of destinations you'd like to visit, and the platform will notify you whenever fares drop.
Here’s how it works: Just add your airport and the places you’ve been wanting to visit, and the platform will send real-time email and text alerts for flights discounted up to 90%. Plus, members can get over $1,000 in immediate savings with perks and discounts from top travel brands.
Sign up with Dollar Flight Club today and you could save up to $2,000 on your next adventure.
— With files from Godwin Oluponmile
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Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
Airlines (1); Q4 Inc (2); Fox Business (3); U.S. Securities and Exchange Commission (4); Yahoo Finance (5); Bureau of Labor Statistics (6); Bureau of Transportation Statistics (7); CNBC (8)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
