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Recent FERC Ruling is Bad for Consumers

May 06, 2026

The top two expenses for U.S. airlines are labor and fuel. That shouldn’t come as a surprise. After all, it’s people and jet fuel that get planes off the ground and transport millions of people and packages to places around the world every day.

Last year, salaries, wages and benefits accounted for 34 percent of airline operating expenses, and fuel accounted for 20 percent.

Amid global conflicts, that cost is going up. The Argus US Jet Fuel Index™ shows that the average price in the U.S. doubled from February to May. What’s more, a recent forecast from Deutsche Bank said U.S. passenger airlines’ 2026 fuel bill will increase $24 billion relative to its pre-Feb. 28 forecast.

Now the cost of transporting jet fuel to airports is rising as well. An April 24 rulemaking from the Federal Energy Regulatory Commission (FERC) will allow pipeline’s rates to outpace increases in their costs.

In her dissent, FERC Commissioner Judy Chang wrote, “Today’s order will likely shift billions of dollars between pipelines and shippers over the next five years, and given the cumulative nature of the index, will have repercussions long past this cycle. Furthermore, higher transportation costs via indexed rates will have a real-world financial impact, including to consumers that use oil or other petroleum-derived products.”

Commissioner Chang is right – this decision will have real financial impact to everyday Americans, especially as oil prices remain elevated.

U.S. passenger and cargo are individually taking proactive, voluntary steps to mitigate the impacts as jet fuel prices have risen. This includes reducing flight frequencies on some routes, retiring older and less fuel-efficient aircraft, cutting unprofitable routes, increasing fees for checked bags and raising fares when necessary. U.S. airlines will continue to work closely with FERC to clearly convey how these rulings affect cargo and passenger air travel, airports and the communities they serve.