The U.S.-Israeli war on Iran is causing high jet fuel prices and possible fuel shortages, leading to JetBlue, America’s fifth largest airline, to possibly merge with United Airlines.
On Feb. 28, when President Donald Trump began strikes on Iran, a major oil exporter, U.S. gas prices soared by more than 20%. In New York, prices surpassed four dollars per gallon.
This energy crisis, caused by Iran’s closure of the Strait of Hormuz, led to significant disruptions for U.S. airlines.
In addition to airspace closures that ended many U.S.-based flights bound to Israel, Qatar, the United Arab Emirates and Saudi Arabia, the war also led to surging jet fuel prices.
Europe is also suffering from jet fuel shortages as the Airport Council International Europe wrote in a letterthat the continent will have a shortage of fuel.
“If the passage through the Strait of Hormuz does not resume in any significant and stable way within the next three weeks, systemic jet fuel shortage is set to become a reality for the EU,” the AIC wrote in the letter.
In March, to help recover losses, JetBlue raised checked bag fees from roughly $4 to $9 dollars per bag, depending on fare.
The airline also announced plans to park four Airbus aircrafts and cancel some Boston-based flights.
In the crowded U.S. travel market, JetBlue has been particularly hit hard given the company’s already strained financial position. In 2025, the airline posted a net loss of $602 million, a troubling figure given that JetBlue has been unprofitable since 2019.
Founded in 1998, JetBlue made its name as a low-cost, high-value carrier offering free Wi-Fi on almost all flights.
However, this middle-market position, responsible for much of JetBlue’s early success, has also forced the company into fierce price competition.
While competing with major carriers like Delta on transatlantic flights, JetBlue also faces tough domestic pressure from budget carriers.
JetBlue even considered a merger with Spirit Airlines in 2022, but the proposal was later rejected.
At the time, Merrick Garland, the attorney general under former President Joe Biden, cautioned that a JetBlue merger could price out many American travelers.
“The Justice Department proved in court that a merger between JetBlue and Spirit would have caused tens of millions of travelers to face higher fares and fewer choices,” he said.
With the Trump administration in office, JetBlue is exploring another potential merger, this time with either United, Southwest or Alaska Airlines.
United, which already has a partnership with JetBlue, appears most likely to acquire the company.
At an industry conference, United’s CFO Michael Leskinen appeared to welcome the opportunity of buying JetBlue.
“I think it’s a unique environment where M&A is possible,” he said. “We’ll see how that plays out, but I do think that this industry would benefit from some.”
If United were to acquire JetBlue, the airline would gain access to a coveted hub at New York’s JFK International Airport, allowing the airline to better compete with Delta and American Airlines.
However, Alaska Airlines, based in Seattle, could also be another compelling partner for JetBlue.
Alaska has already acquired two U.S. airlines in the past 15 years: Hawaiian Airlines and Virgin America.
Today, a merger between JetBlue and Alaska could create a complementary coast-to-coast network that would help both airlines compete with bigger carriers.
Nonetheless, despite the likely benefits for JetBlue investors, another airline merger in the U.S. would likely further spike flight prices as demand rises and competition falls.
The Trump administration, however, appears to be more receptive to mergers than the previous Biden administration.
For the merger to be approved, both JetBlue’s shareholders and antitrust authorities must agree.
