United Cuts Flights as Fuel Costs Surge
United Airlines is cutting flights as fuel prices tied to the Iran war surge, becoming the first major U.S. airline to reduce capacity after weeks of industry warnings.
CEO Scott Kirby said in a staff memo Friday that United will cut about 5% of capacity by trimming less profitable routes as it prepares for a prolonged period of high fuel costs, modeling oil at $175 per barrel and expecting it could remain above $100 through the end of 2027.
Jet fuel prices have more than doubled in the past three weeks, Kirby said, adding that if prices hold, it would mean an extra $11 billion in annual fuel costs. In United’s best year ever, the airline made less than $5 billion.
Kirby said United is not panicking and will manage near-term pressure by cutting unprofitable flying while continuing its long-term growth strategy.
The cuts total about 5 percentage points of planned capacity, including roughly 3 points from off-peak flights such as midweek and overnight routes, about 1 point from reductions at Chicago O’Hare, and another 1 point tied to suspended service to Tel Aviv and Dubai. United expects to restore its full schedule in the fall.
Demand remains strong, with United recording its 10 biggest booked revenue weeks in its history over the past 10 weeks.
Kirby said United will not take steps seen in past downturns such as furloughs or delaying aircraft orders. The airline still plans to take delivery of about 120 new planes this year, including 20 Boeing 787s, with another 130 aircraft due by April 2028. He said nothing changes about longer-term plans for aircraft deliveries or total capacity for 2027 and beyond, but there is no point in burning cash in the near term on flying that cannot absorb these fuel costs.
Other airlines have not announced major cuts, saying that higher demand has helped to offset higher costs.
International carriers have moved faster. Qantas, Scandinavian Airlines, and Thai Airways have raised prices, and Air New Zealand has canceled more than 1,000 flights.
