Avelo Airlines' chief executive is warning that passengers will feel the sting of surging jet fuel prices at the ticket counter, a cost squeeze driven in large part by conflict in the Middle East.
Andrew Levy, the founder and CEO of the Houston-based ultra-low-cost carrier, told FOX Business that fuel costs have returned to levels that demand action. Global average jet fuel prices jumped 9% in a single week to $171.01 per barrel, according to data from the International Air Transport Association. Levy pointed to the Iran conflict and attacks along Middle East shipping routes as the forces pushing prices higher.
His message was blunt: the airline cannot absorb these costs alone, and travelers should expect the difference to show up in ticket prices.
Levy did not mince words about where the pressure is coming from. Fuel, he said, overshadows every other cost challenge Avelo faces, including the broader inflation that has hit the airline industry for years.
"We've been there before, earlier in the period of the year when this conflict began, and then things moderated. Now we're back up to levels that are, you know, I'll just call them uncomfortably high."
He acknowledged that inflation has piled on additional costs beyond fuel, but framed those as familiar headwinds the company has already been managing. Fuel is different. It moves fast, and it moves big.
"Fuel is what's got our attention more than anything right now."
On the question of whether those costs will reach passengers, Levy left no ambiguity.
"At the end of the day, we have to be able to pass these costs onto our customers."
That candor stands out in an industry where executives often soften the message. Levy was direct: if fuel stays elevated, fares go up. The math does not leave room for charity.
He is not the only airline executive sounding the alarm. Ryanair CEO Michael O'Leary said Thursday that airfares could rise "significantly" if oil prices remain elevated, according to Reuters. When two CEOs on opposite sides of the Atlantic, one running a European giant, the other a young American discount carrier, deliver the same warning in the same week, the signal is hard to dismiss.
The Middle East conflict has been driving jet fuel costs skyward for months, and the ripple effects extend well beyond the airline industry.
Despite the cost crunch, Levy reported that travelers kept booking through the summer months. Avelo posted what he described as a "very, very strong summer even with high fuel prices." That resilience gave the airline room to absorb some of the blow without immediately hiking fares to levels that would scare off its core customers, budget-conscious leisure travelers flying out of secondary airports near major cities.
But Levy was careful not to project that strength forward without qualification.
"We'll see what fuel looks like in the fall."
That caution matters. Summer is peak travel season. Demand is naturally high, and airlines can fill seats more easily. Fall is softer. If fuel stays at $171 per barrel or climbs further while bookings cool off, the squeeze tightens. Airlines either raise fares and risk losing price-sensitive customers, or eat the cost and watch margins shrink.
Levy acknowledged the tension directly. Travelers have limits, and the airline has to respect them.
"Everybody has a price at which they're going to travel either more often or less often, and so we have to be mindful of that."
That balancing act, passing costs through without pricing out your own customer base, is the central challenge facing every discount carrier right now. Fuel costs and pricing pressures have already been squeezing travelers heading into the fall season.
Even with fuel costs elevated, Levy is not pulling back on growth. Avelo plans to launch commercial service from McKinney National Airport in Texas on November 11. The move fits the airline's core strategy: target residents who live near smaller airports outside major metro areas and offer them a convenient, low-cost alternative to driving across town to a congested hub.
"Our complete focus is targeting the residents that live near secondary airports of large metropolitan areas."
Avelo launched in April 2021 and now serves more than 35 destinations. The airline has extended its booking schedule through April 2027, a signal of confidence in sustained demand. Further out, Avelo plans to begin taking delivery of its first Embraer E195-E2 jets in 2028, expanding a fleet currently built around Boeing 737 aircraft.
Levy's background lends weight to the growth plan. He co-founded Allegiant Air, another ultra-low-cost carrier that built its business on underserved secondary markets, and served as chief financial officer at United Airlines. He has seen both ends of the airline business, the scrappy startup model and the legacy carrier machine, and is betting the startup playbook still works.
The discount carrier landscape is shifting, with competitors adjusting strategies and chasing new routes. Avelo's decision to keep expanding while warning about cost pressures suggests Levy believes the demand is there, if the price stays right.
Levy's warning fits a pattern that extends well past airline tickets. Record fuel prices driven by Middle East instability have been squeezing American wallets across the board, at the gas pump, in shipping costs, and now at the departure gate. When the cost of moving anything rises, consumers pay the bill one way or another.
Levy framed the inflation challenge as persistent but manageable, at least compared to the volatility of fuel.
"Certainly there's been a lot of other costs, inflation over the past few years, which has added to our challenges, but that's really nothing new, and we'll keep powering through that."
The distinction matters. Inflation grinds. Fuel spikes. Airlines can plan around a slow, steady cost increase. A 9% weekly jump in jet fuel prices is a different problem entirely, one that demands immediate decisions about pricing, routes, and capacity.
Levy closed the interview on an optimistic note, pointing to Avelo's expansion plans and strong demand as reasons for confidence heading into the end of the year.
"Lots of exciting things ahead of us, and we're just looking forward to finishing the year strong."
Optimism is fine. But when the CEO who sets your ticket price tells you fuel costs are "uncomfortably high" and that those costs will be passed along, the only question left is how much more you will pay, and how long the Middle East keeps the meter running.