US airlines lost close to $1 billion last quarter as Iran war sends costs higher

U.S. Airlines lost close to a billion dollars in the first quarter of 2026, according to new federal data.

Data from the U.S. Bureau of Transportation Statistics shows the 22 scheduled U.S. passenger airlines lost a combined $966 million after taxes last quarter. It's a steep decline year over year, from when the same market lost $209 million in 2025.

Jet fuel prices have more than doubled since the beginning of the war with Iran, and airlines are now passing those costs on to passengers at the ticket counter and baggage claim.

According to Kayak, the average cost of a domestic ticket was $293 in January. That same fare has now climbed to $383.

Airlines have also canceled or rerouted more flights. American Airlines, for example, said some flights will be removed from its schedule in August and September to help manage costs.

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The U.S.-Israel campaign against Iran and Iran's response has resulted in damaged oil infrastructure throughout the gulf and a sharp decline in the passage of oil through the Strait of Hormuz, which normally accounts for roughly 20% of global oil traffic.

Analysts warn that even if the situation in the Middle East ends tomorrow, it could be months or longer before ticket prices and fees come down for passengers.