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U.S. Airlines Keep Profits Steady as Fuel Costs Surge

New York Times Business •
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At a J.P. Morgan conference, executives from most major U.S. carriers said ticket sales remain robust despite a sharp jump in jet‑fuel prices triggered by the Iran war. American Airlines and Delta reported eight of their ten best sales days this year, indicating that corporate and leisure travelers are still booking at elevated fares.

Jet fuel climbed to $3.78 a gallon on Monday, roughly 50% above the pre‑war $2.50 level, according to Argus Media. Both American and Delta said the surge added about $400 million each to their operating costs, yet they left first‑quarter profit guidance unchanged, banking on strong demand to offset the expense.

Deutsche Bank’s price analysis shows last‑minute fares to Europe, Asia and beyond now average $1,900, up from $830 for Atlantic routes and $1,000 for Pacific trips before the conflict. Domestic coast‑to‑coast tickets rose about 16%, while fares to Mexico stayed flat and Latin‑American routes even slipped lower, reflecting uneven price pressure across markets.

Airlines are tweaking fare classes and inventory rather than slashing capacity. Premium seats can absorb higher prices, while economy slots are being re‑priced or reduced. Unlike many European carriers, U.S