Airfares Up 22%, Passenger Counts Down — and Airlines Are Fine With It

U.S. airfares rose more than 22% in September from a year earlier, even as checkpoint screenings track toward their first annual decline since 2020. Airline executives say they prefer it that way. Higher fares, not fuller planes, are the priority.

The shift is deliberate. American, Southwest, United and Delta have all said capturing richer tickets matters more than flying record numbers of travelers. The economics are simple: jet fuel, the industry's biggest expense after labor, has more than doubled year over year. U.S. Gulf Coast spot prices hit $4.63 a gallon, according to the U.S. Energy Information Administration. Carriers are passing that cost to passengers instead of absorbing it.

How are airlines trading seats for fares?

American Airlines made the strategy explicit on its earnings call Thursday. "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," Chief Commercial Officer Nat Pieper said.

The numbers show the trade-off. American's load factor — a gauge of how full planes fly — fell to 83.4% in the third quarter from 86% a year earlier. Fewer filled seats, higher revenue per seat.

Southwest tells the same story. Its average third-quarter fare was $231.69, up nearly $50 from a year earlier. That figure excludes the carrier's new fees, including charges for checked bags and seats closer to the front of the plane. Meanwhile, Southwest's revenue passenger count fell 3.2%, to about 33.5 million people.

Both metrics beat the airline's own forecasts. "Passenger fares came in about $3 above what our forecast was and the more important thing is that passenger volumes also exceeded our expectations," CEO Bob Jordan said Thursday.

How many travelers have disappeared?

Since April — when airlines began warning in earnest that fuel would hit profits — through Thursday, about 9.3 million fewer people passed through airport checkpoints than in the same period of 2025, according to the Transportation Security Administration. That drop is under 2%, but it breaks years of steady growth.

Not every carrier is shrinking. United Airlines flew 2.4% more passengers in the third quarter than a year ago, and its unit revenue rose 16% — the largest 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 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."

What happens to prices next?

Fuel is still climbing. United expects to pay an average of $4.80 a gallon in the fourth quarter, up from $3.90 in the third. Executives across the industry say they remain confident in their pricing power, and demand for premium cabins — seats that cost hundreds, sometimes thousands, of dollars more than coach — stays robust, according to their earnings-call commentary.

The profit picture is mixed. 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 expecting to post a loss this year.

Capacity is the other lever. American and others have trimmed growth plans or warned the industry could dial back expansion. Fewer seats for sale, with demand holding, pushes fares higher still. Fare tracker Hopper already expects this holiday season to carry the most expensive ticket prices in years.

Two further tests sit ahead. Smaller carriers Frontier Airlines and Allegiant Air, which report results in coming weeks, serve more price-sensitive customers — their numbers will show whether budget travelers are pulling back. And Spirit Airlines, which shut down in early May, removed a discount option from the market. "Some of its customers have likely stopped flying," Bank of America said in a research note Thursday.

If the yield-over-volume strategy holds through the holidays, travelers should expect expensive tickets and slightly emptier planes to remain the industry's chosen equilibrium into 2026.