U.S. airlines saw jet fuel prices more than double in March as the war in Iran raged on, according to new data from the U.S. government.
The Bureau of Transportation Statistics noted that airlines spent $5.06 billion in jet fuel in March, compared to $3.23 billion in February. They also used 19.5% more fuel than the previous month. Cost per gallon was up almost 31% compared to February.
Airline executives have been warning about the impact that rising jet fuel prices will have in the industry if the war in Iran continues and prices remain high for longer.
Ryanair CEO Michael O'Leary said in late April that European airlines will fail if that's the case. Speaking to CNBC, O'Leary said his airline is protected because it had hedged 80% of its fuel but noted that others could face "real failures."
"Pricing has mushroomed since March. Jet A-1 was about $80 a barrel in March. It's now $150," O'Leary said. "I think there will be failures," O'Leary added. "If it continues at $150 a barrel into July, August, September, then you'll see European airlines fail and that, in the medium term, would probably be good for Ryanair's business."
Gasoline prices in the United States have also increased substantially, with the average cost of regular fuel now about 50% higher than before the conflict began.
The national average price for regular gasoline rose 31 cents in the past week to $4.48 per gallon on Tuesday, according to AAA data. The increase extends a broader upward trend that has unfolded over the past two months as global crude oil supplies tightened and supply routes through the Persian Gulf came under sustained disruption.
At the consumer level, higher fuel costs are feeding into broader economic pressure. A report from CNBC found that many American households have reduced spending in response to sustained gasoline price increases, with limited expectation of near-term relief. Meanwhile, the Los Angeles Times reported that inflation linked to energy costs has risen even as consumer spending patterns remain relatively steady in some categories, reflecting uneven adjustment to higher prices.
Markets are now tracking apparent progress in talks between the U.S. and Iran to end the conflict. Oil prices plunged following a report on the matter, with Brent crude falling almost 8% by 3:02 p.m. ET. West Texas Intermediate fell 7.2% and stood below $95 a barrel.
An Axios report claimed that Washington and Tehran are getting close to a one-page memorandum of understanding with 14 points to end the war and usher detailed nuclear negotiations.
