United Airlines (UAL) Cuts 5% of Flights as Jet Fuel Costs Surge on Iran War

TLDR

• United Airlines fell 4.46% on Friday after CEO Scott Kirby announced a 5% cut to planned flights.
• Jet fuel prices have nearly doubled since late February due to the war in Iran.
• United is preparing for oil to hit $175 a barrel and stay above $100 through the end of 2027.
• If fuel stays at current levels, United’s annual fuel bill could rise by about $11 billion.
• United says it will keep taking delivery of new aircraft and won’t furlough staff.

United Airlines (UAL) dropped 4.46% on Friday after CEO Scott Kirby told employees the carrier would cut roughly 5% of its scheduled flights. The move comes as jet fuel prices have nearly doubled since late February, driven by the ongoing war in Iran.

United Airlines Holdings, Inc., UAL

Kirby outlined the situation in a staff memo posted to the company’s website. He said United is now planning for oil prices to climb as high as $175 a barrel and stay above $100 through the end of 2027.

At those levels, the added fuel cost would total about $11 billion a year — more than double the profit United posted in what Kirby called its “best year ever.”

The airline has already been trimming flights that aren’t pulling their weight. That includes some midweek, Saturday, and overnight routes with weaker demand.

Under the updated plan, United will cancel around three percentage points of off-peak flying in the second and third quarters. It will also pull about one percentage point of capacity from Chicago O’Hare.

Service to Tel Aviv and Dubai will stay suspended. All told, the cuts add up to about five percentage points of the airline’s planned capacity for the year.

Kirby said United still plans to restore its full schedule this fall — assuming fuel prices don’t keep climbing.

Fares Helping Offset the Pain

The saving grace, at least for now, is demand. Big U.S. carriers have managed to push through two fare increases of roughly $10 each way. Kirby said fares booked in the past week were up 15% to 20%.

Analysts at Melius Research say the strong booking environment could support a further 5% to 7% fare increase. United has reported that the first 10 weeks of 2026 were the strongest booking weeks in its history.

Rival Delta Air Lines has also flagged flexibility to trim capacity if prices stay high, after raising its first-quarter revenue forecast earlier this week.

U.S. airlines are at a disadvantage here compared to some European and Asian carriers — most don’t hedge fuel costs, leaving them more exposed to price spikes.

Long-Term Strategy Unchanged

Despite the near-term cuts, Kirby told staff that United isn’t pulling back on its bigger growth plans.

The airline will continue taking delivery of around 120 new aircraft this year, including 20 Boeing 787s. Another 130 aircraft are due by April 2028.

Kirby also said United will not furlough staff or delay future investments — a different playbook than past downturns.

After hours on Friday, UAL stock was up 1.49% to $91.29, partially recovering from the day’s loss.

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