Latin American airlines face rising fuel costs and higher fares

Passenger traffic rose 2% as airlines added more than 90 routes

Latin American airlines are confronting a sharp increase in fuel costs that industry leaders say could feed into higher fares and limit tourism growth. Fuel accounted for 38% of airlines’ operating costs in the second quarter of 2026, up from 28% a year earlier, according to figures presented by Peter Cerdá, CEO of the Latin American and Caribbean Air Transport Association. Cerdá presented the data at the association’s Airline Leaders Forum in Mexico City.

The annual forum ran Sunday through Tuesday and brought together airline executives, aviation regulators and industry representatives. The meeting focused on the effects of rising expenses on fares, passenger traffic and the region’s aviation expansion.

Valora Analitik, which attended the conference, reported that total airline fuel spending increased nearly 80% over the same period. Valora Analitik based the calculation on financial reports from airlines representing more than 80% of regional passenger traffic.

Aviation Week reported that Michael Linenberg, a Deutsche Bank aviation analyst, told conference participants that Latin American airlines’ fuel expenses in 2026 were expected to be $3.4 billion higher than the projection made in February.

Linenberg said airlines were responding by increasing fares and focusing on higher-paying passengers. He said larger companies were better positioned to absorb the rising expenses, while industry analysts warned that smaller, low-cost airlines could face greater difficulty absorbing the costs.

Despite the increase in expenses, passenger traffic in Latin America and the Caribbean rose 2% between January and July compared with the same period a year earlier. The association also said airlines had introduced more than 90 routes across the region.

Figures presented by the association put the aviation industry’s contribution to Latin America’s economy at approximately $240 billion. The industry supports about 8.3 million jobs, according to the association.

Cerdá warned that higher fuel prices, airport charges and taxes could limit future expansion and make air travel less affordable. He called for greater cooperation among governments, airlines and airports to improve infrastructure, review taxes and keep air travel accessible as the industry expands.