Airlines are gearing up for a busier — and costlier — holiday season

Demand for air travel is on the rise ahead of the holidays. So are the costs.

But jet fuel hasn’t been this expensive since 2014. Airlines also racing to hire thousands of employees to meet growing demand: pilots, flight attendants, reservations agents, baggage handlers and many others, competing in a tight labor market that would have seemed impossible in the early days of the pandemic.

And, airlines have run through much of the $54 billion in government payroll aid that helped cover their labor bills during the pandemic.

The rise in costs is threatening the industry’s attempt to return to profitability after losing a record $35 billion last year when the pandemic snapped a decade of profits. For passengers, the combination of returning demand and higher costs could mean more expensive ticket prices ahead.

Delta Air Lines last month said higher jet-fuel prices would weigh on its bottom line in the fourth quarter. Frontier Airlines on Wednesday forecast a loss on an adjusted basis for the fourth quarter due to higher fuel costs.

Benchmark U.S. jet fuel was $2.27 a gallon on Nov. 10, jumping 25% in three months.

The rise in fuel prices is “definitely delaying the earnings recovery,” said Savanthi Syth, an airline analyst at Raymond James. “If it’s a slow burn, airlines can handle it. This move up in this short of a period is not good.”

Airlines eager to cash in on a return to demand have tried to balance — with varying degrees of success — how much they can fly with their current staffing levels.

Overall, U.S. carriers will fly about 6% less in November and December compared with 2019, before the pandemic, according to aviation data and consulting firm Cirium. Low-cost airlines like Frontier and Spirit Airlines are exceptions, with more capacity scheduled than they did two years ago.

The ramp-up has been bumpy. Spirit, Southwest Airlines and American Airlines have each had mass cancellations since late July, many of them due to staffing shortages that make it harder to recover from routine issues like weather. Spirit and Southwest had trimmed some of their schedules to give themselves more wiggle room should something go wrong. Southwest has also boosted the ranks of backup crews with new hires and more staff coming back from leave. Over the weekend, Southwest offered flight attendants, ground crews and others up to 120,000 frequent flyer miles, worth more than $1,400, to work certain numbers of shifts over the next two months.

American, for its part, is offering flight attendants a minimum of 50% more pay for working holiday trips and triple pay if they also have perfect attendance through early January. It is also offering $1,000 attendance bonuses to other groups throughout the company and at its regional subsidiaries. Pilots, however, turned down an offer of double pay for peak…