Airline jet fuel prices will eventually come down, but that doesn’t mean the cost of flights will, according to Dallas-based Southwest Airlines’ chief executive.
Speaking at Bernstein’s 42nd Annual Strategic Decisions Conference on Thursday, Southwest CEO Bob Jordan said in prepared remarks: “I think we — our network competitors, you can tell, we’re all focused on ratable production of results, steady production of results, sustainable margins.” He continued, “And so I do think that produces a backdrop where we’ll — there’ll be — we’ll certainly not attempt to give some of these fare increases back.”
Aircraft fuel and oil are some of the biggest expenses for airlines, according to published statistics from World Air Transport — comprising nearly 29% of all costs and “highlighting the significant impact of fuel prices on operational expenses.”
Jordan said that the aviation industry has had seven consecutive fare increases since Feb. 1, acknowledging that Southwest had “participated in all of those.”
“That’s the most that I could remember in my 38 years in the industry, but with fares up though that much, there’s been no drop off in at all,” he said. ‘So no indication that the consumer is elastic in the spare environment. So leisure business across geographies, across all points in the booking curve, the consumer remains very strong despite this rise in fares.”
Airline fares rose nearly 21% in the past year, according to the U.S. Bureau of Labor Statistic’s Consumer Price Index Summary published earlier this month.
And Jordan seemed to indicate that further fare increases may be in store for customers.
“If you just took today’s revenue environment or yield environment and you — and you took fuel prices as they are today. No, no, it’s not close,” Jordan said in response to a question about whether Southwest can cover the jet fuel price hike “at the latest round of fare increases.”
“So you still — you need further increases to fully cover the rise in fuel this far.”
Southwest operates a robust route network from Dallas, the company being based at Love Field. It operates 18 of the 20 gates at the airport.
Jordan’s comments come just over a month since his airline reported record first-quarter operating revenue of $7.2 billion and net income of $227 million. Southwest previously said it assumed fuel will cost between $4.10 and $4.15 per gallon for the second quarter of 2026, as airlines continue to reel from the impact of the ongoing war with Iran that has closed the Strait of Hormuz.
Jordan appeared to have a positive business outlook on fuel prices’ impact on Southwest’s business, saying “I’m becoming increasingly bullish that we will be able to cover these fuel increases with revenue increases.”
Fare increases aren’t the only way airlines have tried to grapple with the increase in jet fuel prices. Southwest, Fort Worth-based American Airlines and other major carriers have hiked checked bag fees in recent months amid the Iran conflict.
