Airline executives still fretting over the pace of travel recovery in many markets now face another potentially significant short-term headache: rising fuel prices.

The average combined jet fuel price at four major U.S. gateways was $2.39/gallon on Oct. 15, data compiled by Argus for Airlines for America show, up from $2.30 on Oct. 8—a 4% rise in a week. The jump from Sept. 15’s $2.05/gallon was 16.5%. 

The rapid changes have airlines bracing for a difficult few months. Executives at Delta Air Lines, the first of the major global carriers to report third-quarter earnings, sounded a clear warning on an Oct. 13 earnings call.

“We expect a modest loss as the recent rise in fuel prices will pressure our ability to remain profitable in the current quarter,” President Glen Hauenstein said.

Delta sees its average per-gallon price ranging between $2.25-2.40/gallon, up from $1.94 in the just-completed quarter.

“Just to remind you, a $0.05 movement in fuel equates to roughly $40 million of [quarterly] expense,” Hauenstein said.

Delta will have plenty of company. 

“We believe the major theme that will emerge throughout this earnings cycle will be the lament that jet fuel costs are up 60% year-over-year,” Cowen & Co. analyst Helane Becker wrote in an Oct. 15 investor note. “We believe these higher jet fuel costs will persist through 2022, limiting the recovery in earnings because of margin pressure, but, airlines will raise ticket prices to cover these costs.”

Delta confirmed as much on the call but cautioned that recouping higher fuel costs through fare hikes takes time, since many tickets are sold months ahead of time. Mix in uncertainty with international and some intra-regional flying because of varying travel restrictions, and airlines are facing a unique pricing environment.

“While fuel is a near-term headwind for our results, we expect to recapture higher fuel in the medium to long run as we return to our more historical correlation between fuel prices and revenue,” Hauenstein said. “I think we’re a bit in uncharted territory here as the recovery continues. And while I think it might be difficult in the very short run, despite the fact that the booking curve has moved in a bit, that I would estimate that four to six months is about right because we believe that demand and capacity will fall back into a very good equilibrium by next spring, which would put you inside that window.”

Like most U.S. carriers, Delta is seeing strong domestic demand, with leisure flying back to 2019 levels. Business travel and international flying are less of a certainty. The fuel-price spike is not limited to North America, however, and airlines that don’t have strong domestic business to count on may suffer more than their U.S. counterparts.

IATA’s global spot-fuel pricing index showed across-the-board average prices rose 17% for the 30-day period ending Oct. 8. Regions that trended above the average included Asia/Oceana as well as the Middle East/Africa, both of which saw fuel prices rise nearly 20% in 30 days.

While airlines never welcome higher fuel prices, the recent spike’s timing is inopportune for another reason, Becker said. Many airlines have been deferring maintenance until demand dictated they needed their aircraft in service. With traffic picking up and destined to strengthen on the heels of moves such as the U.S. relaxing some foreign-visitor requirements, maintenance spending is likely to rise.

“Airlines deferred maintenance during the worst of the pandemic,” Becker wrote. “As they bring aircraft back into service, they are going to have to make an investment in bringing them back to [airworthy] status.”

This article was updated to correct monthly fuel-price percentage increase data.