If you have booked a flight this year, you have probably felt it. Maybe the fare was higher than you expected. Maybe an airline you were counting on just vanished. Maybe you saw a headline about two carriers trying to merge and wondered what it means for you. 2026 has been one of the strangest years the airline business has seen in a long time, and it really comes down to three big stories that are all tangled together. Let us walk through them like we are chatting over coffee.
Here are the three threads to keep in mind:
Everything else flows from this: fuel got really expensive, really fast. A war between the US, Israel, and Iran started on February 28, 2026. A few days later, on March 4, Iran closed the Strait of Hormuz, the narrow shipping lane that carries a big share of the world's oil. Roughly 20% of global oil supplies got disrupted. Brent crude, the global benchmark, jumped from about $72 a barrel in late February to a peak of $112.57 on March 27, a gain of about 55%.
For airlines, fuel is one of the biggest costs there is, and it got hit even harder than crude. Jet fuel rose about 106% year over year, according to the Bipartisan Policy Center. Jet fuel itself shows the sting: it went from around $2.50 a gallon in late February to $4.88 by early April, nearly double in about six weeks. Here is the twist. The war ended and crude fell back below $75 a barrel by July, roughly where it started, but refined products like jet fuel stayed stubbornly high. So airlines are still paying up even though the oil price on the news looks calm again.
You might expect every carrier to be bleeding money. It is actually a mixed picture. Delta lost $289 million on paper in the first quarter, though much of that was an accounting mark on an investment, and its adjusted earnings were up more than 40% from a year earlier. When Delta reported its June quarter on July 10, it said it had absorbed the highest quarterly fuel expense in its history, yet still turned an adjusted profit and stuck with its full-year outlook.
United set a first-quarter revenue record but said it would trim planned flying for the rest of the year by about 5 points because of fuel, pointing to a $340 million jump in its fuel bill. American posted a first-quarter loss and is staring down more than $4 billion in extra fuel costs this year. Alaska gave up on full-year guidance entirely, saying fuel was just too unpredictable to forecast. The takeaway: the strong carriers are managing, the weaker ones are struggling, and fuel is the thread running through all of it.
And then there is Spirit. If you have flown budget in the last decade, you know the bright yellow planes. On May 2, 2026, at three in the morning Eastern time, Spirit shut down for good after 34 years. It was the first major US airline to fail from insolvency in more than 20 years, going all the way back to Midway right after 9/11.
Spirit had already filed for bankruptcy twice since 2024, so it was fragile before the fuel spike ever hit. The company blamed high oil prices from the Iran war for pushing it over the edge. Transportation Secretary Sean Duffy pushed back, saying Spirit was in dire straits long before the war. Honestly, both are true. A roughly $500 million federal rescue was on the table, one that would have handed the government about a 90% stake, but it collapsed when big bondholders including Citadel and Ares Management said no.
About 17,000 people lost their jobs, and many found out only about an hour before the public announcement. If you had a Spirit ticket, the scramble was real, though rivals moved fast. United rebooked around 14,000 Spirit passengers within 12 hours, and several airlines offered stranded travelers one-way fares around $200. Spirit's roughly 190 planes, gates, and airport slots are now being carved up and sold to competitors like Frontier, United, and Southwest.
Whenever an airline disappears, the survivors get bigger, and 2026 has brought a wave of deal-making. Some of it happened, some of it did not. Allegiant closed its roughly $1.5 billion purchase of Sun Country on May 13. In Asia, Korean Air is set to fully absorb Asiana Airlines on December 17 after signing the formal merger agreement in May. In Europe, Lufthansa Group agreed in June to raise its stake in Italy's ITA Airways from 41% all the way to 90%.
Not every dance partner said yes. United CEO Scott Kirby confirmed in late April that he had approached American about merging and got turned down flat. American called the idea anticompetitive, and even President Trump said he opposed it. JetBlue, meanwhile, quietly had advisers look at whether it should sell itself to a rival, according to a Semafor report in March. So the appetite for consolidation is clearly there, even when the deals do not close.
So what does all this mean the next time you book? Fewer ultra-cheap options now that Spirit is gone, fares running a little higher because fuel is still pricey, and a handful of large airlines getting even larger. It is not all gloom: the industry as a whole is still expected to post record profits this year, around $41 billion by IATA's estimate. But 2026 has been a reminder that the airline business sits at the mercy of forces far outside any airport, from oil markets to geopolitics. We will keep tracking each of these threads as they develop, so you always know what is going on behind the fare you are paying.
Reported from public sources. Figures were accurate around the time of writing and can change as airlines report new results.
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