Fewer people are flying as airfare soars. Here's why airlines aren't worried

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Fewer people are flying this year, but with airfare this high and climbing, airline executives say that's just fine.
At the New York Hilton in Midtown Manhattan on Friday night, the aviation industry held its annual Wings Club gala, honoring Ed Bastian, CEO of profit-leader Delta Air Lines.
North American airline CEOs and other executives at the black-tie bash told CNBC that demand trends aren't worrying them, but persistently high, profit-crimping fuel prices are.
The number of people screened at U.S. checkpoints is on track for its first annual decline since 2020. Major U.S. carriers have said capturing higher fares matters more than fully filling planes or flying record numbers of travelers.
"We're actively prioritizing yield versus load factor and really happy as we see it. It fits right in with the premium investments that we're making," American Airlines Chief Commercial Officer Nat Pieper said on the company's earnings call Thursday.
American's load factor, a gauge of how full planes are flying, fell to 83.4% in the third quarter from 86% in the same quarter of 2025.
Fares keep climbing
Plane ticket prices have skyrocketed as airlines grapple with a spike in jet fuel prices, their biggest expense after labor, and pass more of those costs on to customers.
Fares in September were up more than 22% from a year earlier, according to the latest inflation read. Fare tracker Hopper said it expects this holiday season to come with the most expensive ticket prices in years.
The average Southwest Airlines fare in the third quarter, for example, was $231.69, up close to $50 from a year earlier. That doesn't include Southwest's new fees, like its extra charges for checked bags or a seat closer to the front of the plane.
The airline's revenue passenger count, however, fell 3.2% from a year ago to about 33.5 million people.
Still, both fares and the passenger counts exceeded Southwest's expectations.
"Passenger fares came in about $3 above what our forecast was and the more important thing is that passenger volumes also exceeded our expectations," Southwest CEO Bob Jordan said on an earnings call Thursday.
Since April — when airlines began warning in earnest about profits taking a hit from the spike in jet fuel — through Thursday, about 9.3 million fewer people were screened at airport checkpoints than in the same period of 2025, according to the Transportation Security Administration. That's down less than 2% from last year, but it follows years of growth.
With jet fuel prices more than double year-ago levels — as seen in U.S. Gulf Coast spot prices at $4.63 a gallon, according to the U.S. Energy Information Administration — airlines have focused on recovering as much of the fuel spike as possible.
Despite some drops, airline executives said during their earnings calls that overall travel demand is robust, especially for profitable premium cabins like business class.
And not every carrier is seeing a decline. United Airlines flew 2.4% more passengers in the third quarter than a year ago and said its unit revenue rose 16%, the biggest increase since the pandemic.
"I've been pleasantly surprised at the industry's ability this year to raise yields and pass through much of the increase in fuel prices," CEO Scott Kirby said on the company's earnings call Wednesday. "So it's possible that airlines will continue to focus on yields at the expense of load factor and that alone could get us to double-digit margins next year."
Profit hit
Most airlines expect fuel costs to keep biting, but executives say they're confident in their pricing power.
United, for example, said it expects to pay an average of $4.80 per gallon for fuel in the fourth quarter, up from $3.90 per gallon in the third.
American, United, Delta and Southwest all cut their 2026 profit forecasts this month when they reported earnings. American is the only one of the four that expects to post a loss this year.
American and others have also reduced growth plans or warned the industry could dial back its capacity expansion goals, which could keep fares elevated. Reduced capacity can make bookable seats scarcer, driving up prices even more if demand holds.
The carriers said demand has been particularly strong for premium seats, which command hundreds, if not thousands of dollars, more than coach tickets.
"Today, we find ourselves yet at another inflection point for our industry and the world. ... Geopolitics affecting our business, driving the price of jet fuel to historic highs," Bastian said in his award-acceptance speech, adding that artificial intelligence makes it hard to predict months or weeks ahead.
"It causes many people to question yet again the durability of our industry. But I'm not worried because I know the people in this room, and I know your resilience and how you've demonstrated that time and time again," he said.
Smaller airlines set to report results in the coming weeks, starting with JetBlue Airways next week, followed by Frontier Airlines and Allegiant Air, have traditionally focused on more price-sensitive customers, which could show if those travelers are pulling back at all.
One factor that could also affect air travel is the demise of Spirit Airlines, which went out of business in early May.
"Some of its customers have likely stopped flying," Bank of America said in a research note Thursday.
More jets, engine hangover
Many of the problems that plagued the airline industry for years are starting to abate.
In some cases, aircraft deliveries are still years behind schedule. But Boeing, whose CEO, Kelly Ortberg, attended on Friday night, and its main rival, Airbus, have ramped up production. Boeing will update investors on its production outlook when it reports quarterly results Tuesday.
The Federal Aviation Administration has approved Boeing's Max 7, a key smaller jet for Southwest Airlines, and the Max 10, which Alaska Airlines and United Airlines have been waiting for for years.
Pratt & Whitney parent, RTX, and GE Aerospace say they're improving engine durability and shop visit turnaround time, though customers say more improvements are needed.