Airlines spent 56.4% more on jet fuel in month after Iran war started, U.S. government says

• March fuel spending was $5.06 billion, a 56.4% increase from February's $3.23 billion and 30% higher than March 2025
• Jet fuel prices exceeded $4 per gallon in some markets by April as the conflict continued and the Strait of Hormuz remained effectively closed
• Airlines expect customers to absorb higher fuel costs by early 2027, while Spirit Airlines cited the fuel crisis as derailing its mid-year bankruptcy emergence plans

Summary

U.S. airlines experienced a dramatic 56.4% surge in jet fuel costs in March 2026, spending $5.06 billion compared to $3.23 billion in February, according to U.S. government data. The spike followed U.S.-Israel strikes on Iran that effectively closed the Strait of Hormuz, disrupting global oil supply routes.

Key Financial Impact:

• March fuel spending was 30% higher year-over-year versus March 2025
• Jet fuel prices exceeded $4 per gallon in some markets by April
• Fuel represents airlines' largest expense after labor costs

Industry Response:

Multiple carriers have lowered or completely withdrawn their 2026 financial guidance due to elevated fuel costs. Airlines are scaling back capacity to manage expenses and avoid oversupply in markets. Spirit Airlines cited the fuel crisis as a factor that disrupted its mid-year bankruptcy emergence plans.

Market Outlook:

Major carriers anticipate passing higher fuel costs to consumers, with full cost recovery expected by early 2027 or potentially late 2026. Despite cost pressures, travel demand remains resilient—travel agency ticket sales rose 12% year-over-year in March to $10.4 billion, with domestic trips up 5% and international trips up 1%, according to Airlines Reporting Corp.

Sector Implications:

The crisis highlights airlines' vulnerability to geopolitical disruptions and energy price volatility. The closure of the Strait of Hormuz—a critical oil transit chokepoint—demonstrates how regional conflicts can rapidly impact operating costs across the aviation sector, forcing strategic adjustments and testing pricing power with consumers.