General prices have risen several-fold since 1975, yet air fares have fallen sharply in real terms. That makes aviation a case study in cost pressure absorbed by productivity, until a shock like 2026 pushes fares back up.
Measure | Start | End | Prices multiplied by |
|---|---|---|---|
US CPI-U, annual average | 53.8 (1975) | 321.9 (2025) | 5.98 |
Australian CPI, eight capitals | 38.8 (June qtr 1985) | 141.7 (June qtr 2025) | 3.65 |
Sources: BLS CPI-U via the Federal Reserve Bank of Minneapolis; ABS CPI via the Australian Taxation Office. The Australian series starts in 1985, the earliest year the ATO publishes on the current ABS index base.
The US Bureau of Transportation Statistics (BTS) reports that the average domestic itinerary fare was $387 in 2025, up 32.5% on $292 in 1995, while consumer prices rose 111.4% over the same period. After adjusting for inflation, the 2025 fare was 37.3% below 1995 and 39.0% below the 2000 peak (BTS, 2025 annual average domestic air fare). BTS fares include taxes and required fees but exclude optional fees such as baggage.
That long decline reversed abruptly in 2026. The BLS consumer price index for airline fares was 20.7% higher in April 2026 than a year earlier, against 3.8% for all items (BLS, The Economics Daily). The BTS average domestic fare reached $428 in the first quarter of 2026, a record for any quarter in nominal terms (BTS, first quarter 2026).
BITRE has tracked domestic fares since October 1992. Its real (inflation-adjusted) indexes, based on the lowest available fare in each class on the top 70 routes, stood well below July 2003 levels in May 2026.
BITRE real domestic air fare index (July 2003 = 100) | May 2025 | May 2026 |
|---|---|---|
Best discount | 56.8 | 61.0 |
Restricted economy | 52.5 | 55.4 |
Business | 50.2 | 52.1 |
Source: BITRE, Domestic Discount Airfares. BITRE notes the index measures the lowest available fares, not average fares paid or airline yields.
In other words, the cheapest Australian domestic fares in May 2026 were about 39% lower in real terms than in July 2003. Business fares were about 48% lower.
US jet fuel prices rose about 4.3 times between 1995 and 2025, roughly double the rate of general inflation. In 2026, the price US airlines paid per gallon nearly doubled within weeks.
US Gulf Coast jet fuel spot price, annual average | US$ per gallon |
|---|---|
1990 | 0.762 |
1995 | 0.494 |
2000 | 0.850 |
2008 | 2.964 |
2016 | 1.252 |
2022 | 3.374 |
2025 | 2.114 |
Source: US Energy Information Administration, via FRED, series AJFUELUSGULF. The EIA series begins in 1990, so a 50-year comparison is not available from this source. Over 1995–2025 the US CPI-U rose from 152.4 to 321.9, a multiple of about 2.1. The result is sensitive to the start year: measured from 1990, jet fuel rose about 2.8 times against CPI of about 2.5.
The BTS records the average price US scheduled airlines paid for fuel; it notes these costs may be affected by hedging.
US airlines, average fuel cost per gallon | US$ |
|---|---|
May 2025 | 2.21 |
February 2026 | 2.39 |
March 2026 | 3.13 |
April 2026 | 4.11 |
May 2026 | 4.09 |
Sources: BTS, March 2026 fuel release; BTS, May 2026 fuel release.
In May 2026, US airlines spent US$6.66 billion on fuel, up 83.9% on May 2025, while using slightly less fuel. The increase was almost entirely price. The ACCC links the 2026 fuel surge to conflict in the Middle East, which drove international refined fuel benchmark prices sharply higher.
This article does not include a long-run Australian jet fuel price series, because no free official national series was found. Australian aviation fuel prices follow the same international refined-product benchmarks and the AUD–USD exchange rate that drive diesel, which the ACCC reported rising from 176.6 to 322.4 cents a litre in the five largest cities between 20 February and 31 March 2026 (ACCC Weekly fuel price monitoring report, 24 September 2026).