The ongoing conflict between the US and Israel in Iran has led to a spike in fuel costs, causing airlines to raise fares in order to cover the increase. Despite this, there has been no decrease in travel demand, according to a report by The New York Times.

The war, which began in late February, has resulted in significant disruptions in the aviation sector worldwide, primarily due to ongoing airspace restrictions in the Middle East.

Despite the challenges faced by the industry, executives from major US airlines stated at an investor conference on Tuesday that strong travel demand has helped offset the impact of winter storms and the steep rise in jet fuel prices since the conflict began. As of Monday, jet fuel prices were up by 50% compared to pre-war levels, as reported by Forbes.

According to Consumer Edge, a data analytics firm, the average ticket transaction value for the six largest US airlines has increased between 2% at American Airlines and 16% at Delta Air Lines in the week ending March 8, compared to the previous week.

Although American Airlines and Delta Air Lines are facing an additional $400 million in fuel costs, they have not revised their profit outlook for the first quarter, citing strong ticket sales. Both airlines have reported that eight of their 10 highest sales days on record have occurred so far this year. American Airlines also expects a revenue increase of over 10% in the first quarter compared to the same period last year, its biggest year-on-year quarterly jump.

Deutsche Bank analysts have observed a general increase in airfares since the conflict began. The largest gains have been seen in last-minute bookings, which are typically made by business travelers. On March 12, the average lowest fares for next-day flights to destinations in Asia, Europe, and beyond were around $1,900, compared to $830 for similar flights on February 26. Flights across the Atlantic saw a jump to $1,000, while those across the Pacific were at $1,900. Even flights within the US have seen an increase of at least 16%.

Leisure travelers booking three weeks in advance have also experienced a rise in fares since the start of the war, except for flights to Mexico, which have remained largely unchanged. The increase in airfares can be attributed to the rise in jet fuel prices, which typically account for the second-largest operating cost for airlines after labor expenses. In 2025, jet fuel accounted for 20-25% of operating costs for major US airlines. Before the conflict, jet fuel prices were around $2. 50 per gallon, but as of Monday, they have reached $3. 78 per gallon, according to Argus Media.

European airlines are also feeling the impact of the war, with chief executives warning of potential airfare increases as flight cancellations continue to drive up costs and jet fuel prices.