Supply Growth
But a fast-growing supply of seats will be a headwind for efforts to raise fares. United reignited concern last week with its plan to expand as much as 6 percent each year through 2020. JetBlue said it would boost 2018 capacity as much as 8.5 percent, Alaska Air has targeted 7.5 percent and Southwest will grow about 5 percent.

Total industry capacity will increase about 5.5 percent, said George Ferguson, a Bloomberg Intelligence analyst.

For now, “Airlines don’t have pricing power,” he said. It will be difficult for carriers to raise fares this year enough to offset the higher cost of fuel, “unless somebody modifies their expansion plans, especially United and Southwest.”

Southwest, which pioneered the discount model, is a frequent holdout from rivals’ attempts to raise fares. United didn’t match a Delta price increase last month, JPMorgan’s Baker said. The attempt later failed.

Rising Costs
Deep discounter Spirit Airlines Inc. and other smaller carriers should be eager to see fares climb as they face higher labor and fuel prices, said Andrew Davis, an analyst at T. Rowe Price Group, the largest shareholder at American, and an investor in United, Delta and Southwest. The price of fuel in New York has risen above $2 a gallon, about 30 percent higher than a year ago.

Doug Parker, chief executive officer of American, said Jan. 25 that fares “are too low for oil prices this high.” Carriers will find a way to pass on the increase to consumers, he said, “but it takes time.”

There’s generally a gap of at least three months between when fuel climbs and fare increases show up.

Power Vacuum
Historically, airlines have dealt with rising fuel prices by paring back capacity, Delta CEO Ed Bastian said last month. It’s too early for Delta to think about adjusting its growth plans, but the carrier will be prepared to act if fuel prices “continue on this tear,” he said.

Carriers are right to be cautious about raising fares too quickly, said Rick Seaney, chief executive of 3 Victors, which tracks real-time air fare purchases. There’s a risk that when ticket prices increase enough to cover the cost of fuel, that can also discourage some travel.

“Of the 2 million passengers flying on a given day, 1 percent to 3 percent may not have taken that trip had the price been $1 or $3 more,” Seaney said. “Each one of those passengers had a breaking point where they wouldn’t have flown. One more dollar and you broke the camel’s back.”