A Southwest Airlines Boeing 737 arrives from Chicago and lands at Los Angeles International Airport on March 7, 2026.
Kevin Carter | Getty Images
How volatile is the fuel market this year?
southwest airlines Chief Financial Officer Tom Doxey told CNBC that the company hired a ship this spring to send jet fuel from Texas to California, where prices were much higher, raising concerns about supply. It was a first for a Dallas airline.
“It brought a week’s worth of supply to the West Coast at a time when supply was most constrained and most at risk,” Doxey said.
The ship left Houston, transited the Panama Canal and arrived in Los Angeles on May 28, carrying about 12.6 million gallons, Southwest Airlines said in a statement. For context, Southwest Airlines used 564 million gallons of jet fuel last quarter.
The West Coast is more dependent on imports than other regions of the country. Jet fuel prices have soared and been volatile since the US and Israel attacked Iran in February.
Southwest Airlines said Thursday that fuel costs rose nearly $900 million in the second quarter from a year earlier.
The airline said it took advantage of the Jones Act exemption, a 1920 law that requires cargo between U.S. ports to be carried on U.S. vessels, for the shipment to California. President Donald Trump waived that obligation in March as fuel prices soared in the weeks following the start of the Iran war and a subsequent rumbling of ships in the critical Strait of Hormuz.
Concerns about supply have intensified this year as countries have restricted exports due to concerns about fuel shortages. A Southwest Airlines spokeswoman said those concerns have since subsided.
Jet fuel is the biggest expense for airlines after personnel costs. Prices eased in late spring and early summer, but rose again this month as tensions with Iran flared up again.
last week, united airlinesThe carrier, which flies more international flights than any other U.S. airline, said it uses the latest available fuel prices in its quarterly estimates because prices are volatile.
The company said in a July 15 report that jet fuel increased by $575 million in the third quarter alone, increasing adjusted earnings per share by $1.12.
For the past decade or so, U.S. airlines have abandoned fuel hedging to lock in costs through futures contracts as a glut of supply in the U.S. kept prices down.
This time, airlines are scaling back capacity expansion plans, which is also leading to higher fares. Airline executives said this month that despite the fare hikes, demand remains strong and is likely to continue.
