The 2026 Iran Crisis having wreaked havoc on the commercial aviation sector in terms of fuel prices, capacity cuts, and airspace disruption earlier this year. As such, you might think that the fact that the US and Iran have now signed an interim peace deal would be a cause for celebration for airlines and their passengers. However, while the situation is stabilizing, it won’t be a short-term silver bullet.

Recent reporting on the matter by Reuters noted that air fares are expected to remain high for the time being. This is because, while fuel prices have indeed dropped since peaking earlier this year in April, they still remain higher than this time last year. Furthermore, capacity constraints are limiting airlines’ ability to bounce back. With that being said, United Airlines looks set to recoup its losses.

Things Are Looking Up For United Airlines

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Jet fuel is a major expense for any airline. However, United Airlines is one of the biggest carriers in the world by most metrics. As such, the sheer scale of its operations meant that it was hit particularly hard by the fuel price spike that occurred earlier this year as a result of the US and Israel’s attacks on Iran and the subsequent disruption in the wider Middle East area. To cover these costs, it raised its bag fees.

Quoting analysis by Deutsche Bank, Reuters said that, with fuel prices having increased three times as fast as airfares between January and May, US carriers faced $24.1 billion in additional fuel costs during this period. Of this, they were only expected to be able to recover around $14.4 billion, or 59.75%. United CEO Scott Kirby, however, has a more confident projection for his airline, and he told Reuters that:

“We’re on a path to recovering 100% by the end of the year.”

Prices Remain Higher Than Last Year As Capacity Slumps

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You might think that this recovery, particularly at United Airlines where Scott Kirby expects the carrier to be able to recoup all of its extra expenditure, would mean that passengers would correspondingly benefit from a drop in the prices of their tickets. However, this looks unlikely to be the case, and for a variety of reasons. First and foremost, despite the drop, fuel prices are still much higher than in 2025.

Indeed, quoting research by the International Air Transport Association, Reuters notes that global jet fuel prices are still 54% higher now than they were at the same point last year. While the North American figure of 50% represented a marginally better showing, other markets continue to suffer. Indeed, fuel prices remain 60% higher than last year in the Middle East, with Asia and Oceania’s figures hitting 60.2%.

Another reason why passengers are unlikely to see any significant immediate relief in terms of airfares, despite the drop in fuel prices and the interim US-Iran peace agreement, is the fact that capacity constraints are limiting growth. This scarcity, therefore, gives airlines no reason to drop their fares just yet. Quoting Raymond James, Reuters said that US domestic fares were up 34.1% this June vs 2025.

A Closer Look At United Airlines’ Third-Quarter Capacity Situation

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As it happens, United Airlines’ overall capacity in the third quarter of the year has actually increased in 2026 compared to 2025. However, when examined more closely, there are some areas that do see notable cuts, namely in its regional operations. Indeed, there will be 5.9% fewer regional flights operated by Mesa Airlines under the United Express brand this Q3 than in 2025, dropping from 21,852 to 20,564.

According to scheduling data made available by Cirium, an aviation analytics company, CommuteAir will see an even bigger drop, with this carrier’s total number of Q3 United Express flights falling by 7.8% from 21,458 to 19,775. Elsewhere, however, GoJet, Republic, and SkyWest-operated United Express flights are on the up, as are those operated by United Airlines’ mainline division (3.7% overall).