Are Flight Prices Going Down After the Iran War?

A research-backed analysis of the 2026 fuel crisis: what happened, where prices sit now, and what business travelers need to know

On February 28, 2026, the United States and Israel launched military strikes on Iran. Within days, the Strait of Hormuz, the narrow chokepoint through which roughly a fifth of the world's oil and gas travels, was effectively closed. What followed was the most severe disruption to global aviation since the COVID-19 pandemic: jet fuel nearly doubled, tens of thousands of flights were cancelled or rerouted, and an ultra-low-cost carrier (Spirit) went out of business.

Nearly four months later, the crisis is resolving, on the supply side. A US–Iran framework is in place, tankers are moving through Hormuz again, and crude and jet fuel have retreated sharply from their spring highs. 

But for business travelers and corporate travel managers, the relevant lesson is the one that hasn't reversed: fares went up fast and are coming down slowly, if at all. This piece breaks down what happened, where the numbers stand today, and what the data, including ITILITE's own booking data - says about where things go from here.

1. Where Things Stand Now: Crisis Easing, Fares Stuck

The supply shock that drove this crisis is unwinding. The headline developments:

• The war is winding down: A US–Iran ceasefire took hold in early April after five-plus weeks of fighting. Following months of brinkmanship over the Strait of Hormuz, including a US naval blockade in April and a sharp flare-up in early June, the two governments agreed to new ceasefire terms on June 12, and the presidents of the US and Iran signed a memorandum of understanding on June 17 establishing a 60-day window to negotiate a final end to the war.
• Hormuz is reopening: The MOU mandates toll-free passage and targets full transit capacity within 30 days. Tankers have resumed transiting the strait, Kuwait has lifted its force majeure notices, the UAE's ADNOC has resumed supply operations, and Washington granted Iran a 60-day license to sell oil. Analysts estimate a full reopening could return more than 80 million barrels of stranded Gulf oil to the market, with exports potentially back to pre-war levels by late July.
• Oil has fallen back to earth: Brent crude, which spiked above $120 during the conflict, traded around $78 a barrel in late June, its lowest level since early March, and only about 7% above where it sat before the strikes.
• Jet fuel has roughly halved from its peak: The Argus US Jet Fuel Index hit $4.88 a gallon on April 2; by June 18 it was back to about $2.70, still above the pre-war $2.50, but down more than $2 from the high.
• Airfares have not followed: This is the crux. Despite the fuel collapse, airlines have signalled they will hold prices up. United CEO Scott Kirby said the carrier had recouped less than half of its added fuel costs and expects fares to stay elevated into next year, adding that the longer the situation persists, the more likely the increases stick. JetBlue CEO Joanna Geraghty described a "protracted unwind" rather than a snap-back. Southwest CEO Bob Jordan said in late May there had been no drop-off in demand at all.

A few caveats keep this from being a clean "all clear." The framework is preliminary, and continued Israeli operations against Hezbollah in Lebanon remain the most likely trigger for the ceasefire to collapse, which would send oil straight back up. US strategic petroleum reserves are at their lowest level since 1983, down roughly 18% since the war began, and analysts at GasBuddy caution that consumer fuel prices may not return to pre-war levels until 2027 because global inventories take many months to rebuild. 

2. The Analyst View: What the Research Predicted and What Held

The consensus going into this crisis was that it would not be a short-term blip. With the benefit of hindsight, the forecasts were directionally right on fares and broadly right on fuel.

Tourism Economics, a division of Oxford Economics, modeled a two-month conflict and projected a 5–10% increase in base airfares globally, explicitly the optimistic scenario. The conflict ran longer than two months, and on the ground the increases landed at the high end and beyond. By May 2026, US Bureau of Labor Statistics data showed airfares up 26.7% year-over-year (as analyzed by NerdWallet), and a Points Path analysis found summer 2026 domestic cash fares up roughly 15% and international cash fares up 12% versus 2025.

On specific business-travel routes, Amex GBT's consulting team had modeled price projections assuming oil at $152/barrel:

One prediction that proved especially durable: demand did not collapse. Delta CEO Ed Bastian noted that five of the company's top-ten ticket-sales days in history came after the war began, and United reported some of its highest booked-revenue weeks ever. With planes still full, airlines had little reason to discount, which is precisely why fares have stayed high even as fuel fell.

3. The Parameters That Drove the Crisis

Understanding why fares rose and why they're sticky, requires looking at the compounding factors, not oil in isolation.

• Jet fuel surge (primary driver). Jet fuel is typically 20–30% of an airline's operating costs, and over 40% for low-cost carriers. When that single input nearly doubles in weeks, the math is brutal. US jet fuel rose roughly 95% from $2.50/gallon on February 27 to $4.88 by April 2.
• The crack-spread problem. The "crack spread", the gap between crude and refined products like jet fuel - hit a record high near $80/barrel after the strikes, because the conflict damaged Middle Eastern refining capacity, not just crude supply. The implication: even airlines that hedged crude were exposed to jet fuel rising faster than their hedges anticipated.
• Airspace closures and rerouting. Closures across the Middle East forced thousands of flights onto longer, more fuel-intensive routes. Before the conflict, around 20% of Asia–Europe passengers transited a Gulf hub; that connectivity collapsed, adding hours and fuel burn per long-haul journey.
• Supply shock. Roughly 10 million barrels per day of oil were effectively removed from global markets when Hormuz closed. Alternative routes (Russia for China/India; West Africa and the Americas for Europe) couldn't fully offset the loss at speed.
• Volatility as a pricing variable. Airlines began pricing not just current fuel costs but the uncertainty of those costs, building in buffers,buffers that, as we're now seeing, don't automatically come back out when prices ease.

4. Why Fares Rise Fast and Fall Slowly - the Historical Pattern, Confirmed Live

The single most useful thing to understand about this crisis is a pattern that has held across every comparable shock: fares go up fast and come down slowly. The 2026 episode is now confirming it in real time.

1. 2008: Jet fuel peaked in July 2008 at $3.89/gallon, an 81% jump over the prior year. Twenty-five airlines failed globally in the first half of 2008. The financial crisis then collapsed demand and fuel prices - jet fuel fell to $1.26/gallon by February 2009, yet import airfares still rose 23.3% from May 2009 to May 2010. Airlines did not pass savings back as quickly as they had passed on costs.
2. 2022 (Ukraine): Jet fuel rose about 30% in the six weeks after Russia's invasion.
3. 2026 (Iran): Jet fuel rose about 63% in the comparable window, roughly $103 to $169/barrel and uniquely combined a price shock and a supply shock.

5. Cost Breakdown: Where the Money Goes

To see why fuel moves translate so directly into fares, look at how airline costs are structured:

• Jet fuel: 20–30% (40%+ for LCCs)
• Labor: 25–30%
• Aircraft ownership/leasing: 10–15%
• Maintenance: 8–12%
• Airport and navigation fees: 8–10%
• Sales, marketing, administration: remainder

The practical consequence: a $1/gallon increase, across the ~20 billion gallons US airlines burn annually, adds roughly $20 billion in unbudgeted annual cost if sustained. At the peak, each of the three largest US carriers faced on the order of $400 million in additional monthly fuel cost. US airlines collectively lost about $1 billion in Q1 2026, per the Bureau of Transportation Statistics — which is exactly why, with fuel now falling, carriers are using the relief to rebuild margins rather than cut fares.

Airlines pulled all three available levers at once — raising fares, adding surcharges, and cutting capacity. They also raised checked-bag fees across the board:

These fees, notably, are not captured in headline fare indexes — so the real increase to a traveler's total cost is larger than the fare data alone suggests.

6. Airline-by-Airline: Hedging Decided Who Hurt

The biggest differentiator in exposure was hedging, whether a carrier locked in fuel prices before the conflict.

• US carriers: fully exposed: No major US airline currently runs a traditional financial fuel hedge; American, United, and Southwest operate at spot prices. Delta is a partial exception, it owns the Monroe Energy refinery, a natural hedge against the crack spread - but had no protection against the crude surge itself. The unhedged posture made sense during the long stretch of cheap, stable oil from 2015–2022; in 2026 it left US carriers absorbing the full shock, which is part of why they're so reluctant to discount now.
• European carriers: protected for now, exposed later: European airlines carried far heavier hedges into 2026, Lufthansa ~77% for the full year, EasyJet ~84% for H1, Ryanair 80% of FY2027 at about $67/barrel, IAG 75% in Q1 declining through the year. That protection is temporary and unwinds as contracts expire into 2027, when these carriers become progressively more exposed.
• Asian and Gulf carriers: most structurally exposed. Asia depends heavily on jet fuel refined and exported within the region, and several exporters (China, Thailand) banned or capped exports during the crisis. The Gulf carriers, Emirates, Etihad, Qatar Airways - entered with strong cash reserves but cut millions of seats and saw a roughly 46.6% demand drop in April as hub connectivity broke down.

ITILITE's book shows why corporate travelers felt the full force of this: 

Of all flights booked through ITILITE for January–June 2026 travel, 82.6% were on the four big unhedged US carriers - United (23.6%), Delta (23.5%), American (22.3%), and Southwest (13.2%). None of them carried a financial fuel hedge into the crisis, so spot-price increases passed straight through to the fare. Because those four airlines dominate US domestic corporate travel, there was no hedged alternative to route demand toward; the exposure was structural.

7. The Correlation Timeline: Fuel and Fares, Through the Whole Arc

Here is how the relationship played out from the first strikes through the de-escalation:

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Date	Jet Fuel (US avg)	Domestic Round-Trip Avg	Intl Round-Trip Avg	Key Event
Feb 27, 2026	$2.50/gal	$335	$774	Day before strikes
Mar 1–5	~$4.20/gal	Rising	Rising	War begins; Hormuz closes
Mar 9–15	~$4.50/gal	Up ~24% YoY	Up ~30%	United first US carrier to cut capacity
Mar 30	~$4.80/gal	$350	$998	Fares up sharply; bag-fee hikes begin
Apr 2	$4.88/gal (peak)	—	—	Peak jet-fuel price
Apr 7–8	Retreating	Brief dip	Brief dip	US–Iran ceasefire announced
Apr 13	Back above $100/bbl crude	Rebounding	Rebounding	US naval blockade begins
Apr 20	Elevated	$361 (+8% vs pre-war)	$1,097 (+42% vs pre-war)	—
May 2	Elevated	$361	$1,097	Spirit Airlines ceases operations
Jun 7–8	Elevated	High	High	Worst escalation since April ceasefire
Jun 12–17	Falling	Still high	Still high	New ceasefire terms; US–Iran MOU signed June 17
Jun 18	$2.70/gal	Still elevated	Still elevated	Fuel at lowest since war began; fares unchanged
Jun 23	~$2.70/gal	Elevated	Elevated	Brent ~$78; Hormuz traffic resuming

Sources for timeline: Argus US Jet Fuel Index (via Airlines for America); Kayak weekly fare data (via CNBC); OAG and Cirium capacity data; Britannica/Wikipedia/House of Commons Library conflict chronology; Al Jazeera and CNBC oil-market reporting; NPR/Moneywise jet-fuel reporting.

The takeaway from the full arc: international fares responded faster and harder than domestic (a 42% jump versus 8% by late April), and neither has come down even though fuel has. The right axis of the chart, the part that should worry a CFO, flattens at the top while the fuel line falls away beneath it.

8. What ITILITE's Booking Data Shows: A More Controlled Climb

The headline numbers above  +26% year-over-year fares, +42% on international round-trips, describe the open-market, point-in-time picture: published spot fares, weighted toward international and economy. ITILITE's own booking data tells a quieter, arguably more useful story about what managed corporate travel actually paid.

Across 20,331 ticketed flights booked through ITILITE for January–June 2026 travel (revenue fares only, excluding zero-value and non-fare lines), the average fare held in a tight band around $500–515 per ticket for most of the half-year:

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Travel month	Flights	Avg fare	Median fare	Avg–median gap
January	2,025	$501.91	$419.99	$81.92
February	3,244	$505.13	$415.09	$90.04
March	4,212	$514.08	$435.40	$78.68
April	4,404	$493.16	$413.11	$80.05
May	4,505	$509.59	$428.20	$81.39
June	~4,358	~$542.88	~$418	~$109

Five things stand out, and each maps onto the macro story:

1. The book is 91% domestic - which is exactly why the climb was contained

The single biggest reason ITILITE's average rose modestly while headlines screamed +42% is mix. Nine in ten ITILITE flights are domestic, and domestic fares moved far less than international ones throughout the crisis.

Segment	Share of flights	Avg fare
Domestic	91% (18,532 flights)	$455
International	9% (1,799 flights)	$1,054

International tickets cost roughly 2.3× a domestic one, but at under 9% of volume, the international fare chaos that dominated the news simply didn't have the weight to move ITILITE's blended average much. A travel program's exposure to a fuel shock is, to a large degree, a function of how international its flying is.

2. The corporate climb was measured, not explosive

From January (~$502) to a projected June (~$543), ITILITE's blended average fare rose about 8%, a real increase, but a fraction of the 20–40% spikes seen in open-market international fares. On a strict like-for-like basis (same routes, quarter over quarter), Q1 averaged $508 and Q2 $506, essentially flat. Managed, advance-booked, policy-controlled travel absorbed the shock far better than the spot market. That is the single clearest argument for managed travel in a volatile fuel environment.

3. The increase concentrated on specific lanes, not every route

The blended average hides wide variation. A handful of corporate routes saw genuine double-digit fare jumps from Q1 to Q2, while most held steady, consistent with the widening tail below.

Route	Q1 avg	Q2 avg	Change
PDX–RNO	$344	$474	+38%
ATL–DTW	$431	$561	+30%
DEN–FLL	$413	$520	+26%
DFW–TUL	$371	$450	+21%
IAH–TUL	$363	$412	+14%

4. The pressure showed up in the tail, not the typical ticket

The median fare barely moved all year (~$420), while the average drifted up, so the gap between average and median widened, from about $82 in January to a projected ~$109 in June. In plain terms: most tickets held steady, but a growing minority of expensive trips (long-haul, premium-cabin, rerouted, or last-minute) pulled the average up.

5. Fares were still rising into June - as fuel fell

ITILITE's projected June average is the highest reading of the entire period, even though jet fuel had already dropped by half by mid-June. The industry-wide stickiness, costs falling, fares holding or climbing — is visible directly in the data: the elevated-fare environment kept feeding into corporate bookings on a lag, right as the supply shock eased.

Chart to build (dual-axis, Jan 1 – Jun 30, 2026): Left axis — Argus US Jet Fuel Index ($2.50 → $4.88 peak Apr 2 → $2.70 by Jun 18). Right axis — ITILITE average fare by travel month (the table above). Mark Feb 28 (strikes) and Jun 17 (MOU) as inflection points. The visual payoff is the fuel line spiking and collapsing while the ITILITE fare line drifts steadily upward — the asymmetry in one frame.

9. The Business-Travel Picture: Beyond Price

For corporate travel managers and CFOs, the crisis introduced complications well beyond ticket cost. A GBTA survey of 500 travel managers and suppliers found that 76% said geopolitical tension was moderately or significantly affecting their travel decisions, 79% cited geopolitical instability as their top travel risk (92% in Europe), 36% were re-evaluating duty-of-care policies, and 56% had changed their meetings or events strategy in the prior three months. Industry optimism fell from 59% in January to 41% by April. As GBTA's CEO framed it, the shift was not a pullback from business travel but a more deliberate, carefully managed approach to it.

With the supply shock now easing but fares sticky, the guidance from BCD Travel and Amex GBT still holds and arguably matters more now, because waiting for fares to fall is a losing bet:

What ITILITE's data reveals about the discipline gap? 

Through the first half of 2026, ITILITE travelers booked a median of just 9–13 days before departure, squarely inside the pricier close-in window, where fares run a premium over advance bookings. And as fares climbed through the crisis, lead times compressed rather than extended: the median fell from about 13 days in March to roughly 9 by May. In other words, travelers leaned harder into last-minute booking exactly when advance discipline mattered most. Advance booking is one of the few fare levers a travel program fully controls and the data says it's being under-used.

• Book early and ticket immediately to lock in current pricing before any renewed volatility (the framework is preliminary, and a Lebanon flare-up could reverse the oil decline overnight). The lead-time data above shows there's real, recoverable savings here.
• Mandate premium economy for long-haul daytime flights at 35–40% of business-class fares, the savings are substantial. Note a current quirk: international premium-cabin fares rose only ~7% this summer versus much steeper economy increases, making the upgrade unusually good value right now.
• Push carriers to reflect increases in base fares rather than surcharges, which are harder to negotiate down in corporate agreements.
• Reinforce in-policy booking off-channel bookings are especially risky for duty-of-care compliance in a volatile environment.
• Shift flexible travel toward late August, which is tracking cheaper than peak June–July as demand tapers.

Conclusion: Don't Wait for Fares to Fall

The supply side of this crisis is resolving faster than almost anyone predicted in March. The war is winding down, Hormuz is reopening, crude is back near pre-war levels, and jet fuel has halved from its peak. If the story were only about fuel, the natural conclusion would be "relief is coming."

But the story isn't only about fuel, it's about pricing power. Airlines spent four months raising fares into full planes, lost a billion dollars in the first quarter, and now intend to use falling fuel costs to repair their margins, not to discount. Every prior crisis tells the same story, and the executives are saying it out loud: the longer elevated pricing holds, the more permanent it becomes. ITILITE's own data shows the same thing in miniature, corporate fares still drifting up into June even as fuel fell.

For business travelers, the practical message is simple: the cheap post-pandemic airfares of 2024-2025 are not coming back this year. Analysts don't expect fuel-driven relief to reach consumers until 2027, and fares will lag even that. The organizations that manage this best won't be the ones waiting for prices to normalize, they'll be the ones locking in rates, tightening policy, building flexibility into itineraries, and planning around elevated fares as the new baseline.

Ardra M B

Content Strategist

Ardra is a Content Strategy Manager at ITILITE with 6+ years of experience in travel and SaaS content. She holds a Master’s degree in Political Science from Lady Shri Ram College for Women and transitioned from academic research and travel content into SaaS content strategy.
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She previously worked with JustWravel, where she focused on travel storytelling and digital content. Today, she specializes in SEO and AEO-driven content strategies that help businesses simplify complex travel and expense workflows into search-optimized narratives.
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When she’s not working, Ardra is usually reading or watching films.

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