Key Highlights
- United Airlines shares declined 4.46% on Friday following CEO Scott Kirby’s announcement of a 5% reduction in scheduled flight operations.
- Aviation fuel prices have approximately doubled since the end of February amid the conflict in Iran.
- The carrier is bracing for crude oil to reach $175 per barrel and remain above $100 until late 2027.
- At present fuel price levels, United’s yearly fuel expenditure could increase by approximately $11 billion.
- Despite cuts, United confirms it will continue receiving new aircraft deliveries and maintain current staffing levels.
United Airlines (UAL) experienced a 4.46% decline on Friday following an announcement from CEO Scott Kirby that the airline would reduce approximately 5% of its planned flight operations. This decision arrives as aviation fuel costs have roughly doubled since the final days of February, fueled by the continuing conflict in Iran.
United Airlines Holdings, Inc., UAL
In a memorandum distributed to staff and published on the corporate website, Kirby detailed the airline’s strategic response. He indicated that United is now preparing for scenarios where crude oil prices could surge to $175 per barrel and maintain levels exceeding $100 through 2027’s conclusion.
With fuel at these elevated prices, the additional annual expenditure would reach approximately $11 billion — exceeding twice the profits United generated during what Kirby described as the company’s most successful year on record.
The carrier has been strategically eliminating underperforming routes. This includes certain mid-week services, Saturday flights, and red-eye operations experiencing softer passenger demand.
According to the revised operational blueprint, United will eliminate roughly three percentage points of lower-demand flying during the second and third quarters. Additionally, approximately one percentage point of capacity will be removed from Chicago O’Hare operations.
Flights to Tel Aviv and Dubai will remain suspended indefinitely. Combined, these adjustments represent approximately five percentage points of the airline’s annual capacity projections.
Kirby indicated that United anticipates reinstating its complete flight schedule this autumn — provided fuel prices stabilize rather than continue their upward trajectory.
Strong Ticket Demand Provides Some Relief
A silver lining in the current environment is robust consumer demand. Major U.S. carriers have successfully implemented two fare increases of approximately $10 per direction. Kirby noted that ticket prices for bookings made in the previous week showed increases of 15% to 20%.
Analysts from Melius Research suggest the healthy booking climate could accommodate an additional 5% to 7% fare increase. United has disclosed that the initial 10 weeks of 2026 represented the strongest booking period in company history.
Competitor Delta Air Lines has similarly indicated readiness to reduce capacity if elevated fuel prices persist, following an upward revision to its first-quarter revenue projections earlier in the week.
U.S. carriers face particular vulnerability in this environment compared to certain European and Asian competitors — most American airlines don’t employ fuel hedging strategies, creating greater exposure to volatile price fluctuations.
Growth Vision Remains Intact
Notwithstanding the immediate capacity reductions, Kirby emphasized to employees that United isn’t retreating from its broader expansion objectives.
The airline will maintain its schedule of accepting delivery of approximately 120 new aircraft throughout this year, including 20 Boeing 787 aircraft. An additional 130 planes are scheduled for delivery by April 2028.
Kirby also confirmed that United will not implement employee furloughs or postpone planned capital investments — representing a markedly different approach compared to previous industry downturns.
In after-hours trading on Friday, UAL stock gained 1.49% to reach $91.29, recouping a portion of the regular session’s losses.
