United Airlines will slash capacity by around 5 per cent as soaring fuel costs linked to the Iran conflict hit U.S. carriers, with CEO Scott Kirby warning jet fuel prices have “more than doubled in the last three weeks”.
“The reality is, jet fuel prices have more than doubled in the last three weeks,” Kirby said in a staff memo released Friday. “If prices stayed at this level, it would mean an extra $11B in annual expense just for jet fuel. For perspective, in United’s best year ever, we made less than $5B.”
The airline will trim less profitable flying, including midweek and overnight routes, alongside reductions at Chicago O’Hare and the suspension of services to Tel Aviv and Dubai. United expects to restore its full schedule in the fall.
Kirby said the airline is preparing for a prolonged period of elevated fuel prices, modelling oil at $175 per barrel and expecting it could remain above $100 through to the end of 2027.
Despite the cuts, he stressed the move is a tactical response rather than a broader pullback.
“To be clear, nothing changes about our longer-term plans for aircraft deliveries or total capacity for 2027 and beyond, but there’s no point in burning cash in the near term on flying that just can’t absorb these fuel costs,” he said.
United plans to continue taking delivery of around 120 new aircraft this year, including 20 Boeing 787s, with a further 130 due by April 2028.
The carrier also pointed to continued strong demand, noting it has recorded its “10 biggest booked revenue weeks” in its history over the past 10 weeks.
United is the first major U.S. airline to announce capacity cuts following weeks of industry warnings, as carriers grapple with rising costs linked to the Middle East conflict.
Delta Air Lines has flagged it may trim capacity if fuel prices remain elevated, while other carriers have so far relied on fare increases to offset higher operating costs.
Internationally, airlines including Qantas, Scandinavian Airlines and Thai Airways have already moved to raise fares, while Air New Zealand has cancelled more than 1,000 flights.
