US Airlines Hike Fares as Budget Carriers Seek $2.5 Billion Relief

Major U.S. carriers, including United Airlines, Delta Air Lines, and American Airlines, have implemented significant fare increases and higher baggage fees following a surge in jet fuel costs. The price spike resulted from the closure of the Strait of Hormuz amid conflict in Iran. Domestic economy ticket prices rose 21% year-over-year to an average of $570, while some routes saw increases between 10% and 30%. Despite these costs, major airlines report resilient booking trends and optimistic second-quarter revenue outlooks, with executives suggesting higher prices may persist even if fuel costs normalize.

In contrast, low-cost carriers are struggling with thin profit margins. Budget airlines such as Ryanair, Transavia, and Volotea have reduced flight frequencies, while U.S.-based carriers like Spirit and Frontier face potential insolvency. The Association of Value Airlines has requested $2.5 billion in financial relief from the Trump administration to create a fuel cost liquidity pool and has petitioned for the suspension of federal excise taxes on tickets.

The industry response has drawn political criticism. U.S. Representative Ritchie Torres accused United Airlines of corporate greed, alleging the company intends to pocket fuel savings rather than pass them to passengers. The White House acknowledged the budget airlines' outreach but stated that any discussion of federal policymaking remains baseless speculation until an official announcement is made.