Key Highlights
- United Airlines shares declined 4.46% following CEO Scott Kirby’s announcement of a 5% capacity reduction.
- Jet fuel costs have approached double their late February levels amid the Iran conflict.
- The carrier anticipates oil reaching $175 per barrel with prices remaining above $100 through late 2027.
- Annual fuel expenses could increase by approximately $11 billion at current price levels.
- The airline maintains its aircraft delivery schedule and commits to no staff furloughs.
United Airlines (UAL) experienced a 4.46% stock decline on Friday following CEO Scott Kirby’s announcement that the airline would reduce approximately 5% of its planned flight operations. This strategic adjustment responds to jet fuel prices that have approached double their late February values, a surge directly linked to the continuing Iran conflict.
United Airlines Holdings, Inc., UAL
In a company-wide memo published on United’s official website, Kirby detailed the current situation facing the carrier. The airline now forecasts oil prices potentially reaching $175 per barrel, with sustained pricing above $100 extending through the conclusion of 2027.
Such pricing scenarios would generate approximately $11 billion in additional annual fuel expenses — exceeding twice the earnings United achieved during what Kirby characterized as the company’s most profitable year on record.
The airline has already begun eliminating underperforming routes. This includes certain midweek services, Saturday departures, and overnight flights experiencing softer passenger demand.
According to the revised operational plan, United will eliminate approximately three percentage points of off-peak capacity during the second and third quarters. An additional one percentage point of capacity will be removed from Chicago O’Hare operations.
Flights to Tel Aviv and Dubai remain suspended. Combined, these adjustments represent roughly five percentage points of the airline’s total annual capacity plans.
Kirby indicated that United intends to reinstate full scheduling this fall — provided fuel prices stabilize rather than continue their upward trajectory.
Ticket Prices Provide Some Relief
Robust passenger demand offers a silver lining amid rising costs. Major U.S. carriers have successfully implemented two fare increases of approximately $10 per direction. Kirby noted that bookings completed during the previous week showed increases of 15% to 20%.
Melius Research analysts suggest the healthy booking climate could accommodate an additional 5% to 7% fare adjustment. United disclosed that the opening 10 weeks of 2026 delivered the highest booking volume in company history.
Competitor Delta Air Lines similarly indicated readiness to reduce capacity should elevated prices persist, following an upward revision of its first-quarter revenue projections earlier this week.
U.S. carriers face greater vulnerability than many European and Asian counterparts — the majority avoid fuel hedging strategies, creating increased exposure to sudden price fluctuations.
Growth Plans Remain Intact
Despite immediate capacity adjustments, Kirby assured employees that United’s broader expansion strategy continues unchanged.
The carrier will maintain its schedule of receiving approximately 120 new aircraft this year, which includes 20 Boeing 787s. An additional 130 aircraft deliveries are scheduled through April 2028.
Kirby emphasized that United will avoid staff furloughs and proceed with planned future investments — representing a departure from strategies employed during previous industry downturns.
During after-hours trading on Friday, UAL stock gained 1.49% to reach $91.29, recovering a portion of the regular session’s losses.
