Airlines Adjust Fares Amid Soaring Fuel Prices
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 12 2026
0mins
Source: CNBC
- Fuel Surcharge Increase: Cathay Pacific announced it would nearly double fuel surcharges starting March 18, reflecting the pressure on airlines from soaring fuel prices due to the U.S. and Israel's attacks on Iran, which may impact consumer travel choices.
- Flight Adjustment Risks: Air New Zealand stated it would suspend its financial outlook and make initial fare adjustments if fuel markets and operating conditions remain unstable, highlighting the vulnerability of airlines in a high fuel price environment, potentially affecting profitability.
- Demand and Pricing Power: Despite rising fuel prices, United Airlines CEO Scott Kirby noted that travel demand remains strong, and if this trend continues, airlines may gain more pricing power; however, this will depend on the duration of the conflict.
- Delayed Market Response: Analysts expect airlines to face the most acute financial impact in the next 30-90 days, as they booked yields for flights assuming lower fuel prices, making it difficult to adjust fares quickly, which could lead to earnings hits in the first quarter.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy ALK?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on ALK
Wall Street analysts forecast ALK stock price to rise
11 Analyst Rating
11 Buy
0 Hold
0 Sell
Strong Buy
Current: 46.590
Low
63.00
Averages
71.10
High
80.00
Current: 46.590
Low
63.00
Averages
71.10
High
80.00
About ALK
Alaska Air Group, Inc. is engaged in operating airlines. The Company operates through its subsidiaries Alaska Airlines, Inc., Hawaiian Holdings, Inc., Horizon Air Industries, Inc., and McGee Air Services. The Company's segments include Alaska Airlines, Hawaiian Airlines, and Regional. The Alaska Airlines segment includes scheduled air transportation of passengers and cargo on Boeing 737 (B737), Boeing 787 (B787), Boeing 717 (B717), Airbus A330 (A330), Airbus A321neo (A321neo), and others, throughout North America, Latin America, Asia, and the Pacific. The Regional segment includes Horizon's and other third-party carriers scheduled air transportation on E175 jet aircraft for passengers under capacity purchase agreements (CPAs). The Company serves more than 140 destinations throughout North America, Central America, Asia and across the Pacific. The Company provides freight and mail services (cargo) using both freighter aircraft and the bellies of its passenger aircraft.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
American Airlines to Adopt Starlink for Enhanced In-Flight Internet Service
- Service Upgrade: American Airlines plans to install Starlink internet service on over 500 aircraft starting in early 2027, aiming to enhance customer experience and address consumer demand for faster internet, thereby boosting its competitive position.
- Market Competitive Edge: With American Airlines adopting Starlink, competitors like United Airlines already have over 300 planes equipped with the service, and the rapid rollout will provide American with a significant competitive advantage, especially in customer choice.
- Stock Price Context: Over the past five years, American Airlines' stock has dropped more than 37%, and while the introduction of Starlink won't solve all issues, improving internet service could enhance passenger satisfaction and potentially impact company performance positively.
- Initial Strategic Shift: This technological upgrade is seen as an important step for American Airlines in enhancing customer loyalty and attracting higher-paying customers, although further investment is needed to keep pace with industry modernization.
See More
Alaska Air Shares Surge 12.7% Amid Airline Sector Optimism
- Airline Stock Rally: Alaska Air (ALK) shares rose by 12.7% this week, reflecting a broader optimism in the airline sector amidst rising fuel prices, particularly due to the closure of the Strait of Hormuz.
- Fuel Price Impact: Alaska's management anticipates that higher fuel costs will reduce earnings per share (EPS) by $0.70 in Q1 and over $3 in Q2, highlighting the significant pressure from soaring fuel prices.
- Strong Demand Continuity: Southwest Airlines' CEO noted that despite rising fuel costs, air travel demand remains robust, with the airline participating in seven consecutive fare increases without any drop in demand, providing a positive signal for Alaska Air.
- Potential Earnings Revision: Analysts expect Alaska Air to report a $0.77 loss per share in 2026, but if the airline can offset fuel costs with higher ticket prices, future earnings estimates may see positive revisions.
See More
Alaska Air Shares Rise 12.7% Amid Fuel Cost Management
- Fuel Cost Management: Alaska Airlines is managing soaring fuel costs by increasing fares, with expectations that if this trend continues, the company's profitability could improve, particularly against the backdrop of strong overall airline performance.
- Stock Performance: Shares of Alaska Air Group rose by 12.7% over the week, reflecting market optimism towards airline stocks, especially in light of rising fuel prices, as investors remain positive about the company's future earnings potential.
- Strong Industry Demand: Despite soaring fuel prices, Delta Air Lines reported that strong demand from the first quarter is continuing into the second quarter, indicating sustained consumer demand for air travel, which is particularly relevant for Alaska Airlines.
- Earnings Forecast Adjustment: Alaska Airlines anticipates a $0.70 reduction in earnings per share due to rising fuel costs in the first quarter and over $3 in the second quarter, but if they can offset these costs with fare increases, future earnings expectations may see positive revisions.
See More
Mixed Close for US Stocks as Oil Prices Plunge
- Market Performance: On Wednesday, the S&P 500 Index rose by 0.02%, the Dow Jones Industrial Average increased by 0.36% to a new record high, while the Nasdaq 100 fell by 0.09%, indicating a divergence in market sentiment amid enthusiasm for artificial intelligence and declining oil prices.
- Oil Price Fluctuations: Crude oil prices plummeted over 5% to a five-week low due to optimism surrounding a US-Iran peace deal, which eased inflation expectations and pushed the 10-year Treasury yield down to a 1.5-week low of 4.45%, providing support for the bond market.
- Mortgage Application Decline: US MBA mortgage applications fell by 8.5% for the week ending May 22, with the purchase mortgage sub-index down 0.4% and the refinancing sub-index down 18.1%, reflecting the dampening effect of high interest rates on housing demand, as the average 30-year fixed mortgage rate rose to 6.65%.
- Corporate Earnings Outlook: As of Wednesday, 83% of the 475 S&P 500 companies that reported Q1 earnings exceeded expectations, with projected earnings growth of 12% year-over-year, but excluding the technology sector, the growth is only 3%, indicating signs of overall earnings weakness.
See More
FAA Expects Boeing 737 MAX 7 Certification This Summer
- 737 MAX 7 Certification Progress: FAA Administrator Bryan Bedford anticipates that the Boeing 737 MAX 7 will receive certification this summer, while the larger MAX 10 is expected to be approved by year-end, providing crucial support for Boeing's market recovery.
- Production Rate Increase: The FAA supports Boeing's decision to raise the 737 MAX production rate from 42 to 47 planes per month, with further increases expected in the next 90 days, which will help meet market demand and enhance the company's profitability.
- New Production Line Opening: Boeing aims to increase production to 52 jets per month early next year, following the opening of a fourth 737 production line in Everett, Washington, which will further strengthen its production capacity and competitiveness in the market.
- Quality and Safety Collaboration: The FAA emphasizes collaboration with Boeing to ensure a focus on quality and safety during production, avoiding rework due to quality issues, thereby enhancing overall production efficiency and market trust.
See More
Mixed US Stock Market with Energy Stocks Under Pressure
- Divergent Market Performance: The S&P 500 index fell by 0.07% while the Dow Jones Industrial Average rose by 0.54%, indicating a divergence in market trends, particularly with the Dow reaching a new high, reflecting increased investor confidence in certain sectors.
- Impact of Falling Oil Prices: Crude oil prices dropped over 3% amid optimism for a normalization of oil flows from the Middle East, which not only eased inflation expectations but also pushed the 10-year Treasury yield down to a 1.5-week low of 4.45%, positively affecting the bond market.
- Decline in Mortgage Applications: US MBA mortgage applications fell by 8.5% for the week ending May 22, with the purchase mortgage sub-index down 0.4% and the refinancing sub-index plunging 18.1%, indicating the suppressive effect of high interest rates on the housing market.
- Corporate Earnings Overview: As of now, 83% of the 475 S&P 500 companies that reported Q1 earnings have exceeded expectations, with overall earnings projected to rise by 12% year-on-year, but excluding the tech sector, the growth is only 3%, highlighting disparities across industries.
See More
American Airlines to Adopt Starlink for Enhanced In-Flight Internet Service
- Service Upgrade: American Airlines plans to install Starlink internet service on over 500 aircraft starting in early 2027, aiming to enhance customer experience and address consumer demand for faster internet, thereby boosting its competitive position.
- Market Competitive Edge: With American Airlines adopting Starlink, competitors like United Airlines already have over 300 planes equipped with the service, and the rapid rollout will provide American with a significant competitive advantage, especially in customer choice.
- Stock Price Context: Over the past five years, American Airlines' stock has dropped more than 37%, and while the introduction of Starlink won't solve all issues, improving internet service could enhance passenger satisfaction and potentially impact company performance positively.
- Initial Strategic Shift: This technological upgrade is seen as an important step for American Airlines in enhancing customer loyalty and attracting higher-paying customers, although further investment is needed to keep pace with industry modernization.
See More
Alaska Air Shares Surge 12.7% Amid Airline Sector Optimism
- Airline Stock Rally: Alaska Air (ALK) shares rose by 12.7% this week, reflecting a broader optimism in the airline sector amidst rising fuel prices, particularly due to the closure of the Strait of Hormuz.
- Fuel Price Impact: Alaska's management anticipates that higher fuel costs will reduce earnings per share (EPS) by $0.70 in Q1 and over $3 in Q2, highlighting the significant pressure from soaring fuel prices.
- Strong Demand Continuity: Southwest Airlines' CEO noted that despite rising fuel costs, air travel demand remains robust, with the airline participating in seven consecutive fare increases without any drop in demand, providing a positive signal for Alaska Air.
- Potential Earnings Revision: Analysts expect Alaska Air to report a $0.77 loss per share in 2026, but if the airline can offset fuel costs with higher ticket prices, future earnings estimates may see positive revisions.
See More
Alaska Air Shares Rise 12.7% Amid Fuel Cost Management
- Fuel Cost Management: Alaska Airlines is managing soaring fuel costs by increasing fares, with expectations that if this trend continues, the company's profitability could improve, particularly against the backdrop of strong overall airline performance.
- Stock Performance: Shares of Alaska Air Group rose by 12.7% over the week, reflecting market optimism towards airline stocks, especially in light of rising fuel prices, as investors remain positive about the company's future earnings potential.
- Strong Industry Demand: Despite soaring fuel prices, Delta Air Lines reported that strong demand from the first quarter is continuing into the second quarter, indicating sustained consumer demand for air travel, which is particularly relevant for Alaska Airlines.
- Earnings Forecast Adjustment: Alaska Airlines anticipates a $0.70 reduction in earnings per share due to rising fuel costs in the first quarter and over $3 in the second quarter, but if they can offset these costs with fare increases, future earnings expectations may see positive revisions.
See More
Mixed Close for US Stocks as Oil Prices Plunge
- Market Performance: On Wednesday, the S&P 500 Index rose by 0.02%, the Dow Jones Industrial Average increased by 0.36% to a new record high, while the Nasdaq 100 fell by 0.09%, indicating a divergence in market sentiment amid enthusiasm for artificial intelligence and declining oil prices.
- Oil Price Fluctuations: Crude oil prices plummeted over 5% to a five-week low due to optimism surrounding a US-Iran peace deal, which eased inflation expectations and pushed the 10-year Treasury yield down to a 1.5-week low of 4.45%, providing support for the bond market.
- Mortgage Application Decline: US MBA mortgage applications fell by 8.5% for the week ending May 22, with the purchase mortgage sub-index down 0.4% and the refinancing sub-index down 18.1%, reflecting the dampening effect of high interest rates on housing demand, as the average 30-year fixed mortgage rate rose to 6.65%.
- Corporate Earnings Outlook: As of Wednesday, 83% of the 475 S&P 500 companies that reported Q1 earnings exceeded expectations, with projected earnings growth of 12% year-over-year, but excluding the technology sector, the growth is only 3%, indicating signs of overall earnings weakness.
See More
FAA Expects Boeing 737 MAX 7 Certification This Summer
- 737 MAX 7 Certification Progress: FAA Administrator Bryan Bedford anticipates that the Boeing 737 MAX 7 will receive certification this summer, while the larger MAX 10 is expected to be approved by year-end, providing crucial support for Boeing's market recovery.
- Production Rate Increase: The FAA supports Boeing's decision to raise the 737 MAX production rate from 42 to 47 planes per month, with further increases expected in the next 90 days, which will help meet market demand and enhance the company's profitability.
- New Production Line Opening: Boeing aims to increase production to 52 jets per month early next year, following the opening of a fourth 737 production line in Everett, Washington, which will further strengthen its production capacity and competitiveness in the market.
- Quality and Safety Collaboration: The FAA emphasizes collaboration with Boeing to ensure a focus on quality and safety during production, avoiding rework due to quality issues, thereby enhancing overall production efficiency and market trust.
See More
Mixed US Stock Market with Energy Stocks Under Pressure
- Divergent Market Performance: The S&P 500 index fell by 0.07% while the Dow Jones Industrial Average rose by 0.54%, indicating a divergence in market trends, particularly with the Dow reaching a new high, reflecting increased investor confidence in certain sectors.
- Impact of Falling Oil Prices: Crude oil prices dropped over 3% amid optimism for a normalization of oil flows from the Middle East, which not only eased inflation expectations but also pushed the 10-year Treasury yield down to a 1.5-week low of 4.45%, positively affecting the bond market.
- Decline in Mortgage Applications: US MBA mortgage applications fell by 8.5% for the week ending May 22, with the purchase mortgage sub-index down 0.4% and the refinancing sub-index plunging 18.1%, indicating the suppressive effect of high interest rates on the housing market.
- Corporate Earnings Overview: As of now, 83% of the 475 S&P 500 companies that reported Q1 earnings have exceeded expectations, with overall earnings projected to rise by 12% year-on-year, but excluding the tech sector, the growth is only 3%, highlighting disparities across industries.
See More
