United Airlines The U.S. airline is cutting flights as soaring fuel prices linked to the Iran war hit U.S. carriers, becoming the first major U.S. airline to announce a capacity cut after weeks of industry warnings.
United CEO Scott Kirby said in a staff memo released Friday that the airline would reduce about 5% of its capacity by cutting the least profitable routes. He said the company was preparing for a prolonged period of high fuel prices, modeling oil at $175 a barrel and expecting it could stay above $100 until the end of 2027.
“The reality is that jet fuel prices have more than doubled in the last three weeks,” Kirby said in a statement. “If prices remained at this level, that would mean an additional annual spend of $11 billion on jet fuel alone. For perspective, in the best year in United’s history, we made less than $5 billion.”
Kirby stressed that the airline is not panicking and plans to manage short-term pressure by cutting unprofitable flights while continuing operations. long-term growth strategy.
ELON MUSK PROPOSES TO PAY TSA WORKERS’ SALARIES AMID DHS Budget Impasse
A United Airlines Boeing 787 Dreamliner arrives at Los Angeles International Airport on March 7, 2026, in Los Angeles, California. (Kevin Carter/Getty Images / Getty Images)
United said the reductions would total about 5 percentage points of its planned capacity, including about 3 points for off-peak flights such as midweek and overnight flights, and about 1 point for reductions at Chicago O’Hareand 1 other point related to the suspension of service to Tel Aviv and Dubai. The airline plans to restore its full schedule in the fall.
Despite hindsight, Kirby said demand remains strongnoting that the airline recorded its “10 largest booked revenue weeks” in its history over the past 10 weeks.
He stressed that United was not responding to the oil shock with drastic measures like in past recessions, such as furloughs or delays in plane orders. Instead, the airline plans to continue taking delivery of about 120 new planes this year, including 20 Boeing 787s, with another 130 aircraft expected by April 2028, he said.
MAJOR AIRLINE SUSPENDS ABU DHABI FLIGHTS UNTIL END OF YEAR AMID “UNCERTAINTY” IN AIRSPACE
United CEO Scott Kirby said in a staff memo released Friday that the airline would reduce about 5% of its capacity by cutting the least profitable routes. (Al Drago/Bloomberg via Getty Images / Getty Images)
“To be clear, nothing is changing in our long-term plans for aircraft deliveries or total capacity for 2027 and beyond, but there is no point in spending money in the short term on flights that simply cannot absorb these fuel costs,” he said.
The strategy, Kirby said, is to reduce unprofitable flights in the short term while continuing to invest in long-term growth.
Meanwhile, other airlines have so far not announced significant flight reductions, highlighting how United is one of the first U.S. carriers to move from warnings to action on rising fuel prices.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Commercial ships are pictured off the coast of Dubai on March 11, 2026. The war with Iran has caused oil prices to skyrocket, impacting U.S. airlines. (AFP via Getty Images/Getty Images)
Delta Air Lines said it may reduce capacity if fuel prices remain high, according to Reuterswhile other major U.S. carriers have so far relied on fare hikes to offset rising costs.
International carriers have moved more quickly, with airlines like Qantas, Norwegian Airlines and Thai Airways raising prices, and Air New Zealand canceling more than 1,000 flights, according to previous reports.