Jet fuel prices fall 40 percent since April peak while ticket prices stay elevated

Jet fuel prices have fallen 40 percent from their April peak, according to data cited by The Wall Street Journal. Airlines raised domestic round-trip fares eight times after prices doubled in late February, pushing the average ticket nearly $100 higher than the prior year by May.

Capacity and demand trends U.S. carriers scaled back planned third-quarter schedule increases after fuel costs rose. Earlier plans called for nearly 5 percent more domestic flights than the previous year. Demand has remained steady. Average domestic fares booked a week ahead rose 34.1 percent year-over-year in June, according to Raymond James data.

Carrier exits and market effects A budget carrier based in Florida ceased operations in May after two bankruptcy filings. The exit reduced overall capacity and coincided with higher fares across remaining carriers. Executives at two major airlines said the increases reflect a needed correction after years of lower real fares.

One chief executive told investors the industry would likely keep a larger share of the added revenue than in past cycles.

Consumer response and outlook An Ipsos survey conducted in May found 56 percent of respondents extremely or very concerned about rising airline costs. An analyst noted that the period after Labor Day will test whether carriers maintain higher prices as leisure travel declines.