Jet Fuel Hits a Record as Oil Nears a Five-Month High, Lifting Holiday Airfares

Americans planning to fly for the holidays are facing the highest fares in years, as the cost of jet fuel climbs to a record and oil prices jump on fresh threats to supply from the war involving Iran.

The average price of jet fuel in the United States reached $4.90 a gallon on Thursday, according to the price-tracking firm Argus, the highest single-day average it has recorded and more than double the level of a year ago, NPR reported. Fuel is one of airlines’ largest expenses, and carriers are passing much of the increase on to passengers.

Hayley Berg, lead economist at the travel booking company Hopper, said airfares are at roughly a 10-year high. By her firm’s figures, Thanksgiving tickets are up about 30 percent from last year and Christmas tickets more than 20 percent. Chris Sununu, who heads the airline trade group Airlines for America, said in a television interview this week that carriers are absorbing most of the cost but that some has to be passed on, producing increases of 20 to 30 percent heading into the holidays.

The pressure on fuel comes from the oil market. Brent crude, the international benchmark, rose on Thursday to nearly $113 a barrel at the close in New York, its highest level since mid-May, after a Houthi drone attack at Saudi Arabia’s Shaybah oilfield, which Saudi officials said was intercepted without affecting operations, and Iranian claims, which have not been confirmed, that several tankers had struck naval mines, Maritime Executive reported. The State Department ordered some diplomats and their families to leave Saudi Arabia. Oil traded around $72 a barrel in February, before the conflict began, and peaked around $119.50 in early March, at the start of the war.

Airlines are feeling it in their results. American Airlines abandoned a forecast that had allowed for a profit this year and now expects a loss, as fuel prices outpace fare increases, Reuters reported, and its shares fell 3.5 percent in premarket trading Thursday. Stock markets in Europe and Asia also slid on worries about higher inflation and borrowing costs.

At the gas pump, the national average for regular gasoline was about $4.29 a gallon this week and diesel about $6.30, according to AAA figures cited by The Guardian, both well above last year. President Trump has announced several steps aimed at diesel prices, including temporarily lifting sanctions on some Russian diesel imports and an $8 billion fuel subsidy for farmers. Energy analysts quoted by The Guardian said those moves would do little to lower prices before the November 3 election.

There are some signs of resilience. Delta Air Lines’ chief executive, Ed Bastian, told investors this month that customers had shown only limited resistance to higher fares, and Berg said travelers so far appear willing to pay for traditional holiday trips. Gulf oil export volumes have also recovered to prewar levels within the past week, Maritime Executive reported.

Still, some travelers say they are priced out. Berg said shoppers are comparing fares more carefully and booking earlier, and many began reserving holiday flights as early as September to lock in prices before they rose further.