Air Freight Costs Rise as Jet Fuel Runs 46% Above 2025 Levels

For logistics and supply chain leaders, Capri's earnings are a warning about the hidden cost of lead-time variability. Asian port congestion has delayed full-priced inventory, and with jet fuel up 46% versus 2025, the standard expedite lever is no longer cheap. The real question is whether selective airfreight can restore stock positions without wrecking transportation budgets.

Air freight is turning into a selective but costly release valve for consumer brands whose inventory is stuck in congested global supply chains. The International Air Transport Association reported in its latest release that jet fuel prices remain nearly 46% above 2025 levels, a comparison anchored before the war in Iran caused broad oil and fuel spikes. Because fuel is a major component of air cargo economics, those higher jet fuel prices have pushed air freight rates upward at the same time that port delays are forcing companies to consider faster transport. Capri Holdings' first-quarter fiscal 2027 earnings call shows how this dynamic is playing out. Revenue fell 7.1% year over year, and Michael Kors inventory was down 25% year over year. Part of that inventory decline is intentional: Capri has been reducing markdown and clearance stock to protect pricing power. But the company also suffered delays in full-price receipts because of congestion at Asian ports, leaving it short of the inventory most likely to sell at full price. Tyler Reddien, executive VP, CFO and COO at Capri, said the company is taking action to accelerate receipts where possible, including selective use of airfreight, but that the company is still landing lower than anticipated and the shortfall is affecting sales.

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Revenue fell 7.1% year over year, and Michael Kors inventory was down 25% year over year.

The tension is familiar to supply chain planners: air freight reduces lead time but sharply raises unit economics. With jet fuel still nearly 46% above the 2025 baseline, the breakeven on expedited freight requires enough incremental full-price sell-through to cover both the freight differential and the risk of bringing goods in early during a period of uncertain consumer demand. For a luxury brand such as Michael Kors, where gross margins can absorb some expedite cost but inventory freshness matters, the decision is asymmetric. Losing a full-price sale because an item is stuck at a congested port is a permanent margin loss, while paying higher freight is a near-term cost that may be justified if it preserves revenue. That logic is driving selective expediting rather than across-the-board use.

The broader market impact is mixed. Freight forwarders and air cargo carriers benefit from elevated rates and urgent demand, especially on Asia-to-North America lanes. Shippers with thinner margins or less pricing power are likely to be squeezed because they cannot easily pass higher freight costs through to consumers. Capri's lowered fiscal 2027 total revenue outlook to $3.4 billion, and its expectation that second-quarter inventory will decline in the high single digits, signal that the inventory problem is not a single-quarter issue. It is embedded in the company's planning cycle and may require multiple quarters to correct.