Airlines warn fare increases may be here to stay; prices climb by 24%

Airline executives are warning that today’s expensive tickets might not be temporary – they could become the standard, even if fuel costs eventually settle down.

As reported, rising tensions involving Iran have pushed jet fuel prices higher, forcing airlines to hike fares, cancel routes, and brace for possible shortages.

A recent report from consultancy Teneo found that global airfares are up 24 per cent compared to last year – the biggest jump for this period in five years.

At United Airlines, EVP and Chief Commercial Officer Andrew Nocella suggested that higher prices are here to stay.

READ MORE: Air Canada cancels Montreal-Algiers service amid fuel crisiss

“The longer consumers pay these prices and airlines get used to this revenue stream, the more likely it is to stick,” he said during the company’s earnings call. "That's the simple perspective on it."

CEO Scott Kirby added that fares may need to climb another 15–20 per cent just to cover fuel costs. So far, demand hasn’t dropped at United, though Kirby admitted higher prices could eventually reduce how much people fly.

The airline says it plans to fully recover increased fuel expenses by next year through higher ticket prices.

Extra fees

Airlines aren’t stopping at fares – they’re also boosting extra fees.

United and Delta Air Lines have both raised baggage charges, making it more expensive to check even a single bag.

READ MORE: Jet fuel crisis: Lufthansa cancels 20,000 flights, United mulls 15-20% fare increase

Other carriers are on the same page. American Airlines CEO Robert Isom says customers are still willing to pay more, with strong growth expected.

Meanwhile, Alaska Air Group CEO Ben Minicucci, speaking to investors on April 21, says some of the higher fares are already “sticking.”

Route cutting in Canada

In Canada, Air Canada, Air Transat and WestJet are cutting routes or reducing capacity as they navigate rising jet fuel costs.

As reported Monday (April 27), Air Canada has cancelled its seasonal Montreal–Algiers service for summer 2026, making it the seventh route affected by rising fuel costs.

Air Transat has reduced planned capacity by six per cent from May to October, with the extended suspension of its Cuba service through October accounting for most of that reduction.

WestJet has also trimmed capacity, reducing flights by about one per cent in April, three per cent in May and approximately six per cent in June, while consolidating service on lower-demand routes.

WestJet has also rolled out higher checked baggage fees as of April 23, effective immediately.

Passengers who pay at the airport will be charged an extra $10 for each of their first two checked bags, while those who pay in advance will see a smaller increase of $5 per bag for those same items.

Air Canada, Air Canada Vacations, WestJet (inclusive of Sunwing), Porter Airlines, Air Transat, and Flair Airlines have all signalled that they will raise ticket prices or introduce fuel surcharges as a way to cope with escalating fuel costs.

A harsh summer?

Across the Atlantic, the International Energy Agency (IEA) has warned that Europe could face a jet fuel shortage within weeks, potentially causing major disruptions.

ACI Europe, which represents airports across the European Union, has warned that peak summer travel will face disruption, bringing “harsh economic impacts” for several member states that depend on the boost.

Lufthansa has announced a plan to cancel 20,000 short-haul flights across Europe this summer, saying many routes are no longer financially viable due to surging fuel costs, the BBC reports.

Other European carriers, including Air France-KLM and Delta, have also scaled back some services, while many airlines are increasing fares to offset higher operating expenses.

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