American Airlines CFO warns airfares may remain high despite fuel price drops

American Airlines CFO Devon May has indicated that airline ticket prices are unlikely to decrease in the near future, even if fuel costs decline. This outlook comes as airlines attempt to recover from rising operational costs exacerbated by conflicts in the Middle East.

According to data from the Bureau of Transportation Statistics, average base fares increased by $31 in the second quarter compared to 2025, rising from $405 to $436. While airlines have absorbed some impacts of geopolitical volatility, current fare increases have not been sufficient to offset the escalation in expenses. Consequently, carriers are expected to maintain high pricing to protect profit margins and compensate for recent periods of reduced profitability.

Beyond the aviation sector, the trend of dynamic pricing—driven by artificial intelligence—is expanding into retail. Large grocery chains are increasingly adopting electronic shelf labels (ESL) to update prices in real-time. This technology allows for weather-sensitive pricing, automatic discounts on expiring goods to reduce waste, and price adjustments during peak shopping hours, raising new questions regarding consumer transparency and equity.