Yes, Airfares Are Rising—But Airline Executives Say That Isn't Stopping You From Flying

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Oil prices are high. Airfares are high. And travelers? They're lining up to hit the skies.

Despite a steady drumbeat of rising ticket prices, Southwest Airlines (LUV) CEO Robert Jordan said yesterday at an investor conference, interest in flying don't seem to be taking a hit. American Express executives earlier this week noted "record" travel bookings in the first quarter and growth in April; AAA expected a "slight" year-over-year increase in Memorial Day weekend air travel.1

Kayak data, meanwhile, show average domestic airfares rising steadily all year.2

Rising fuel prices generally aren't good for airlines, and they've contributed to a rise in airfares this year. But that isn't stopping travelers from buying tickets, so it may not pay to expect that rise in prices to reverse anytime soon.

"There's been no drop off in demand at all," Jordan said, according to a transcript made available by AlphaSense. There's "no indication that the consumer is elastic in this fare environment—so, leisure, business, across geographies, across all points in the booking curve, the consumer remains very strong despite this rise in fares."

At American Airlines (AAL), CEO Robert Isom this week observed that his company now manages to get more revenue from upgrades, which once were generally seen as giveaways. That's a measure of the industry's ability to bring in incremental dollars from travelers willing to spend for services—and support margins doing so.

These factors are among the reasons some market watchers see airline stocks as offering opportunities now, with oil prices generally expected to recede and capacity cuts limiting the number of empty seats in the skies.

Deutsche Bank analysts this week raised their price targets on American, Delta (DAL) and two other airlines.3 The JETS ETF, which includes airline shares, has jumped off spring lows into the green for the year, though it's underperformed the S&P 500.

"Given our positive view on the sector (driven by multiple factors including the gradual removal of loss-making capacity) and the fact that the geopolitical backdrop has modestly improved from several months ago, we believe that the risk to share prices for [the second half of] 2026 is to the upside," they wrote.

The bottom line—unsurprisingly, perhaps—is that people flying is good for business, even if there are some high-level concerns about consumer health, particularly on the lower end of the income scale.

"I feel great about demand overall," Isom said. "No doubt, there is a K-shaped aspect to demand right now, but it is clear that no matter what end of the spectrum you're at, people want to travel."

"People are on planes," American Express CEO Stephen Squeri said Thursday. "They're flying."

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