Passenger numbers at U.S. airports are on track for their first annual decline since 2020, even as travelers pay significantly more for flights. According to TSA data, approximately 9.3 million fewer people have been screened at checkpoints since April compared to the same period in 2025. Despite the drop in volume, airlines are focusing on maximizing revenue per passenger rather than filling every seat.

Why are airfares rising so quickly?

The primary driver behind this shift is the dramatic increase in jet fuel prices, which is the largest expense for airlines after labor. Fuel costs have more than doubled compared to last year, with Gulf Coast spot prices hitting $4.63 a gallon. To protect their profit margins, carriers are passing these expenses to consumers.

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Recent data shows the impact on travelers:

  • September airfares rose more than 22% year-over-year.
  • Southwest Airlines' average third-quarter fare reached $231.69, an increase of nearly $50.
  • Ticket prices are expected to remain among the highest in years during the upcoming holiday season.

Prioritizing yield over load factor

Rather than lowering prices to attract more travelers, airlines are focusing on "yield," which is the revenue collected for each mile flown. This strategy involves targeting premium passengers willing to pay more for first class or premium economy seats.

This approach is reflected in the "load factor," a metric used to measure how full an aircraft is. For example, American Airlines reported its load factor dropped to 83.4% in the third quarter, down from 86% the previous year. While fewer people are flying, the higher prices help offset the cost of empty seats and expensive fuel.

What to watch for next

The industry faces a period of transition heading into 2027. Major carriers plan to increase domestic flying capacity significantly in the coming months, which could intensify competition. If fuel prices remain elevated, airlines will likely continue to push for higher yields to maintain profitability.