The same global fuel shock already placing renewed pressure on gasoline prices in the Virgin Islands is spreading into another critical expense for residents and the territory’s tourism economy: air travel, as three major U.S. airlines begin cutting planned flights in response to sharply higher jet-fuel costs.
American Airlines, United Airlines and Southwest Airlines are reducing or reconsidering portions of their schedules as the Iran war and renewed attacks on Middle Eastern energy infrastructure keep oil and refined-fuel prices elevated. The development carries particular relevance for the Virgin Islands because all three carriers currently serve Cyril E. King Airport on St. Thomas, while American also provides direct service to Henry E. Rohlsen Airport on St. Croix. None of the airlines has publicly identified Virgin Islands flights among the routes being cut.
The latest pullback comes as airline executives say passenger demand remains strong but soaring fuel expenses are making some flights economically unattractive. American estimates that the most recent rise in fuel prices alone will add roughly $1 billion to its fourth-quarter costs, with Chief Financial Officer Devon May saying fuel is running about $1 per gallon above what the company assumed in July. Every one-cent change in fuel prices alters American’s quarterly costs by approximately $10 million.
United has already removed some flights it had planned to operate in December and says additional changes could follow during the first quarter of 2027 if fuel costs remain elevated. Southwest, meanwhile, has cut its planned 2026 capacity growth roughly in half and has indicated that further reductions are possible if high fuel prices persist. The carriers are increasingly focusing aircraft on routes and departure times capable of generating sufficient revenue to absorb the increased operating costs.
That shift poses a particular challenge for travelers seeking cheaper tickets. A CNN report carried Thursday by WISH-TV said the flights most vulnerable to removal are generally lower-margin options — including less-popular departure times and routes that become unprofitable when fuel costs rise. The report noted that the changing economics are narrowing choices for budget-conscious passengers even as overall demand for air travel remains strong.
Airfares are already substantially higher than they were a year ago. The U.S. Bureau of Labor Statistics reported last week that the airline-fare index rose 23.4 percent between August 2025 and August 2026, including a 2.7 percent increase in August alone. Gasoline prices nationally were up 27.4 percent over the same 12-month period, illustrating how the energy-price surge is simultaneously affecting ground and air transportation.
For the Virgin Islands, the three airlines now adjusting schedules represent an important share of mainland connectivity. The V.I. Port Authority lists American service to St. Thomas from New York, Boston, Miami and San Juan; United service from Chicago, Washington-Dulles and Newark; and Southwest service from Orlando and Baltimore. American also operates direct flights between St. Croix and Miami.
The territory is entering the latest airline fuel squeeze with fewer low-cost options than it had earlier this year. Spirit Airlines abruptly ceased operations in May, eliminating nearly 20 weekly flights tied to the Virgin Islands market, including Fort Lauderdale-St. Thomas, Orlando-St. Thomas and Fort Lauderdale-St. Croix service. The Consortium reported at the time that Spirit’s collapse removed one of the territory’s most visible low-cost carriers and raised concerns about reduced competition, fewer seats and higher fares.
Breeze Airways subsequently announced twice-weekly service between Tampa and St. Thomas beginning December 16, restoring some Florida capacity. However, as the Consortium reported in May, the new service does not replace the full volume of flights lost with Spirit’s shutdown, leaving the territory particularly sensitive to further changes among the major carriers that remain.
The latest developments in aviation are closely connected to the fuel-market pressures the Consortium documented this week. DLCA’s newest survey placed average regular gasoline at $4.33 per gallon on St. Croix, $5.26 on St. Thomas and $5.54 on St. John, while wholesale prices supplied by Sol Petroleum had already reversed earlier declines. Regular wholesale fuel increased from $3.34 per gallon in the Consortium’s August 24 report to $3.65 in the latest survey; premium climbed from $3.52 to $3.90 and diesel from $4.60 to $5.04.
Those increases were recorded before the full effects of the September 10 attacks that shut down Saudi Arabia’s critical East-West Pipeline and interrupted crude loadings at the Red Sea port of Yanbu. The pipeline has become increasingly important during the Iran conflict because it allows Saudi oil to bypass the Strait of Hormuz, where normal tanker traffic has been severely constrained. The Consortium reported Wednesday that Brent crude had settled at $108.75 per barrel on Tuesday as the latest Saudi disruptions intensified concerns about global supply.
Oil eased somewhat Thursday as Saudi Arabia explored alternative shipping arrangements and markets anticipated partial restoration of the damaged pipeline, but prices remained firmly above $100. Brent settled at $104.82 per barrel, while West Texas Intermediate closed at $101.91. Reuters reported that the damaged Saudi route carries enough crude for its disruption to potentially affect as much as 4 percent of global supply.
That matters to airlines because fuel is one of their largest operating expenses. Unlike a sudden reduction in passenger demand, the current cuts are occurring while bookings remain comparatively strong. United described fourth-quarter bookings as robust, while American reported strength across domestic and international markets and in both premium and economy cabins. The problem is that flights that generated acceptable margins at lower fuel prices can become uneconomic when operating costs rise sharply.
Airlines can respond by raising fares, reducing frequencies or removing weaker flights altogether. United has said it expects to recover increased fuel costs through pricing, but with a delay. That combination — fewer seats and efforts to recover higher operating expenses through ticket prices — creates the possibility of continued upward pressure on fares even if travelers remain willing to fly.
For Virgin Islands residents, any sustained contraction in lower-priced air service would carry consequences beyond tourism. Air travel is the principal connection to the mainland for family visits, medical travel, business and education, while the territory’s tourism industry depends heavily on maintaining sufficient seat capacity from major U.S. gateways. The immediate concern is therefore not that American, United or Southwest has announced cuts to the territory — they have not — but that the economics now driving their broader networks are becoming less favorable to lower-margin flights.
The changing environment also arrives while the Port Authority is actively trying to grow airlift. VIPA’s Airline Service Incentive Program, which runs through December 31, 2026, offers qualifying airlines a 100 percent landing-fee waiver for one year and 50 percent reductions in certain terminal and user fees when carriers establish new routes or add frequencies to St. Thomas or St. Croix.
For now, the Virgin Islands is confronting the same energy shock through two different transportation systems. At local gas stations, higher global oil costs are moving through wholesale prices and, with a lag, potentially into retail prices. In aviation, those same costs are prompting airlines to charge more, reconsider marginal flights and become increasingly selective about where they deploy aircraft.
