The situation: Soaring jet fuel costs in the US and the threat of shortages abroad are forcing airlines to cut flights to protect their bottom lines, prompting some consumers to defer, rebook, or cancel trips altogether.

The details:

While noting it could adjust plans in either direction, United Airlines said it expects a 5-point capacity reduction versus its original schedule, with Q3 and Q4 capacity projected to be flat to up 2%. The airline, which said fuel costs jumped $340 million in Q1 2026, cut its adjusted earnings per share outlook to $7 to $11 from a prior range of $12 to $14.

Alaska Airlines expects Q2 capacity to rise about 1% YoY, nearly a percentage point below its original forecast, as its fuel bill is projected to surge nearly $600 million. The airline withdrew its full-year profit forecast.

Delta, which said its fuel bill will be $2 billion higher in Q2, recently indicated it would “meaningfully” reduce capacity.

Pressure is even more severe in Europe, where the head of the International Energy Agency warned last week that jet fuel supplies could run dry within six weeks. Airlines are responding in several ways:

• Paring short-distance flying: Germany’s Lufthansa has cut 20,000 short-haul flights over the next six months, citing unprofitable routes due to soaring fuel prices.
• Dropping unprofitable service: Air France-KLM eliminated 160 European flights next month that it said are “no longer financially viable.”
• Raising fares: Air France-KLM is also raising long-haul ticket prices, with fares set to increase by €50 ($58) per round trip.

Implications for travel, hospitality, and retail industries: As airlines cut routes and raise fares and fees, consumers are being forced to rethink travel plans. Already, 33% of US travelers say rising costs will lead them to travel less, per a YouGov survey conducted for The Points Guy in March.

That shift could ripple across local economies that had been counting on high-profile events—such as the World Cup and the semiquincentennial of US independence—to drive a travel boom, with 91% of US consumers planning trips and nearly half (49%) intending to travel more than last year, per The Harris Poll. That outlook is becoming increasingly uncertain.

Higher airfares may push some travelers toward shorter or road trips, but rising gas prices could dampen that shift. Some consumers may opt out of travel altogether, while others trade down by shortening trips, choosing lower-cost accommodations, or cutting back on dining and discretionary spending.

Airlines have increasingly relied on affluent travelers to sustain demand, and that dynamic is likely to intensify as higher fares make travel less accessible. While higher-income consumers may continue to fly, price-sensitive segments are more likely to pull back, increasing reliance on a narrower customer base.

The result is mounting headwinds for the broad ecosystem of businesses that depend on travel demand. Hotels, restaurants, and tourist-area retailers face the risk of lower foot traffic and reduced spending per trip as travelers cut back or stay home.