Jet Fuel Costs Put Airline Summer Schedules on the Block

Jet fuel costs are now reshaping airline schedules after U.S. carriers spent $6.47 billion on fuel in April, up 78.0% from a year earlier, while burning almost the same amount of fuel. The U.S. Department of Transportation’s Bureau of Transportation Statistics fuel release (BTS, the federal unit that tracks airline fuel spending) shows the problem in one line: the price per gallon jumped to $4.11 from $2.31.

The squeeze has moved from income statements into departure boards. The International Air Transport Association (IATA, the global airline trade group) cut its profit forecast, Lufthansa Group is pulling short-haul flights, and Air Canada has listed route suspensions that run deep into the fall travel calendar.

The April Fuel Bill Rose While Gallons Barely Moved

BTS counts fuel paid for by U.S. scheduled service airlines, so its April data is a direct measure of what carriers were charged for the fuel already used. The number that changed fastest was the unit cost, not the number of gallons.

The month-to-month comparison adds a second pressure point. April spending was 26.2% higher than March even as consumption fell 2.6%. Against April last year, carriers paid 78.0% more for 0.2% fewer gallons.

That leaves airlines with a fuel bill that is moving faster than their flying. A carrier can trim some frequencies, swap aircraft, or slow expansion plans, but a full network still has to be fueled every morning. The April data shows how quickly the math can turn when the commodity price rises after schedules are already sold.

IATA’s Forecast Now Prices a Lower-Margin Year

IATA’s June airline profitability outlook takes the U.S. fuel shock global. The trade group now expects airlines worldwide to earn $23.0 billion in net profit this year, down from a previous projection of $41 billion and from an estimated $45 billion last year.

• $23.0 billion in expected global net profit, about half of the prior forecast.
• 2.0% expected net margin, down from an estimated 4.2% last year.
• $4.50 expected net profit per passenger, down from $9.10 last year.

Airlines are bearing the brunt of the fuel price shock.

Willie Walsh, IATA’s director general, said that in the trade group’s outlook released in Rio de Janeiro. IATA expects the global airline fuel bill to rise to $350 billion from $252 billion last year, with jet fuel averaging $152 a barrel. It also projects fuel at 31.4% of operating expenses, compared with 25.4% last year.

The trade group still expects passenger numbers to reach 5.1 billion this year and load factors to hit 84.0%. Those figures explain why airlines are trying to keep core networks intact while cutting routes that carry lower yields or require expensive fuel at the wrong time of day.

Hormuz Puts Oil Geography on the Route Map

The aviation fuel spike is tied to a shipping bottleneck that airline planners do not control. The U.S. Energy Information Administration (EIA, the federal energy data agency) said in its Strait of Hormuz oil chokepoint analysis that flows through the strait in 2024 and the first quarter of 2025 made up more than one-quarter of global seaborne oil trade and about one-fifth of global oil and petroleum product consumption.

EIA put 2024 oil flow through the strait at 20 million barrels per day. It also said most volumes moving through the passage have no alternative route out of the region, although Saudi Arabia and the United Arab Emirates have pipelines that can bypass the waterway. EIA estimated about 2.6 million barrels per day of Saudi and UAE pipeline capacity could be available during a disruption.

That mismatch is the fuel market’s constraint. A wide-body aircraft from Dubai, Doha, or Abu Dhabi sits near the source of the oil shock. A U.S. domestic flight still pays a price shaped by the same global barrel, even though the United States imported about 0.5 million barrels per day of crude oil and condensate from Persian Gulf countries through Hormuz in 2024.

Carriers Are Cutting Thin Routes First

Airlines rarely cut evenly across a network. The early public moves are concentrated in lower-profit routes, short-haul flying, and services where a fare increase would risk losing too many passengers. The route map is being edited at the edges before the trunk routes are touched.

• 20,000 short-haul flights: Lufthansa Group said in its summer network optimization notice that it will remove that many flights through October, saving more than 40,000 metric tons of jet fuel.
• Seven Air Canada changes: Air Canada’s fuel impact schedule notice lists suspensions affecting Fort McMurray-Vancouver, Yellowknife-Toronto, Salt Lake City-Toronto, JFK-Toronto, JFK-Montreal, Guadalajara-Montreal, and Algiers-Montreal.
• Select American adjustments: American Airlines told AP it had adjusted service for select routes in August and September, with affected travelers offered alternate arrangements or refunds.

Lufthansa’s notice says the reductions lower group capacity by less than 1% in available seat kilometers, or ASK, a standard measure of seats multiplied by distance flown. Air Canada put its total planned capacity impact at about 1% of annual available seat miles, or ASM, the comparable North American capacity measure.

Small capacity percentages can still create a hard problem for passengers on specific routes. Air Canada says JFK service from Toronto and Montreal is planned to resume Oct. 25. Lufthansa said at least three destinations were temporarily removed from its schedule, with other connections consolidated through different hubs.

Fares and Fees Carry Part of the Bill

IATA expects passenger ticket revenue to reach $839 billion this year, up 9.2% from last year, while passenger demand measured in revenue passenger kilometers rises 2.1%. The group also expects passenger ticket yields to grow 7.0% and ancillary and other revenues to rise 12.6% to $165 billion.

Those numbers match what travelers are already seeing in the cabin purchase path. American Airlines said in its checked bag and Basic Economy update that a first checked bag on domestic, Canada, Puerto Rico, U.S. Virgin Islands, and short-haul international flights costs $50 at the airport for tickets booked on or after April 9. The prepaid first-bag price is $45.

Basic Economy has also been tightened. For domestic U.S. and Canada tickets bought on or after May 18, American lists $55 for the first checked bag at the airport and $65 for the second. The airline said all customers on domestic Basic Economy tickets will be able to select a seat for a fee and will lose eligibility for complimentary and systemwide upgrades.

Airlines can push some of the fuel bill into tickets, bags, seats, and cargo yields. IATA’s forecast still has operating expense growth at 13%, reaching $1.117 trillion. That is why capacity cuts and fee changes are appearing in the same season.

Capacity Data Shows Where the Shock Lands

Aviation data firm OAG’s June airline frequency and capacity data shows global scheduled capacity running 0.4% behind last June, equal to 2.1 million fewer seats. The regional split is uneven, with the Middle East still 17.6% below last June even after an improvement from May.

OAG counted 17,215,322 flights in the schedule from Dec. 29 through the end of the current week, for an average of 102,472 commercial flights per day. That is a big system with narrow margins, and a fuel shock does not have to ground the system to change where the capacity goes.

Middle East cuts are visible in the largest hubs and carriers. OAG said Emirates frequency is down 15.1% this month and Qatar Airways is also behind last June. Dubai remains the region’s largest airport by seats, but OAG’s Middle East data puts it down by just over a quarter from last June.

North America is down 1.2% in OAG’s regional capacity data. Across the U.S. majors, United shows frequency growth of 5.1%, American is up 2.4%, and Delta is almost flat at 0.2%. The U.S. fuel bill, then, has risen faster than the U.S. schedule has shrunk.

The Calendar Runs Through October

The route changes already announced do not end with the first rush of summer travel. Lufthansa’s short-haul reductions run through October. Air Canada’s JFK suspensions are planned to resume Oct. 25. American’s select route adjustments cover August and September, according to its statement to AP.

Travelers with tight connections, smaller-city itineraries, or Basic Economy tickets have the least room for disruption. The cleanest move is still old-fashioned: check the operating carrier’s reservation page before paying for hotels, ground transport, or nonrefundable side trips.

IATA’s forecast covers the full year, and BTS will keep publishing monthly U.S. fuel data as airlines file their numbers. The public schedule now runs into late October, with Air Canada planning JFK service to resume Oct. 25 and Lufthansa removing short-haul flying through the same month.