United Airlines is slashing flights as soaring fuel prices tied to the Iran war hit U.S. carriers, becoming the first major U.S. airline to announce a cut to capacity after weeks of industry warnings.
United CEO Scott Kirby said in a staff memo released Friday that the airline will cut about 5% of capacity by trimming less profitable routes. He said the company is preparing for a prolonged period of elevated fuel prices, modeling oil at $175 per barrel and expecting it could remain above $100 through the end of 2027.
“The reality is, jet fuel prices have more than doubled in the last three weeks,” Kirby said in a statement. “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.”
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