Airlines: fuel story doesn't clear

Gulf Coast jet fuel averaged about $1.93/gal in May 2025, per FRED fred.stlouisfed.org, which is the wrong backdrop for a fuel-shock read on the reported May airline flight cuts. Weekly prints on DJFUELUSGULF were $1.946, $1.875, $2.002, $1.962, and $1.881/gal fred.stlouisfed.org, while WTI averaged about $61.9/bbl in May 2025, down from $79.28/bbl on Jan. 17, per FRED fred.stlouisfed.org. At the same time, CPI airline fares were -11.9% YoY in April 2025 and -11.9% YoY in May 2025, per FRED fred.stlouisfed.org. The hit-or-miss frame is simple: if the market was leaning into a cost-push margin squeeze from energy, that misses the data; the cleaner read is capacity discipline into weak fare power. What would change the read is jet fuel moving back toward the Jan. 17 peak of $2.412/gal on DJFUELUSGULF fred.stlouisfed.org, or fare inflation turning positive; absent that, this is a demand and pricing story, not an energy shock.