The news: North American jet fuel costs are surging, with prices up 98.5% YoY for the week ended September 11, 15.1% MoM, and 5.1% WoW, per the International Air Transport Association.

Airlines are responding by pulling back on capacity to protect margins. United and Southwest are trimming schedules, while American Airlines warned it could follow suit if fuel costs remain elevated, per Reuters.

Zooming in: American Airlines shows just how quickly the economics are changing. CFO Devon May recently said the company’s expected Q4 fuel prices are roughly $1 per gallon higher than the airline assumed in July. It’s the latest bout of fuel-price whiplash for American after an earlier spike in July upended the company’s profit expectations.

Why it matters: Consumers are still spending on travel, but that doesn’t necessarily signal stronger demand in wake of higher prices.

• Bank of America Institute found that airline spending improved this summer even as transactions declined YoY in August, suggesting travelers are paying more while taking fewer trips.
• There are limits to what travelers will pay, as nearly 2 in 5 consumers who didn’t travel this summer said they couldn’t afford it, while about a third said travel was too expensive, per a Deloitte survey.

Implications for travel marketers: Higher fuel costs could create a difficult cycle for consumers. If airlines cut less-profitable flights, there will be fewer available seats, which will drive up fares. Those higher fares, in turn, will push more price-sensitive travelers out of the market.

That puts travel marketers in a tough spot. They need to identify consumers who are still willing to travel while using targeted offers and loyalty benefits to keep more budget-conscious travelers from sitting out altogether.