United Airlines to cut flights due to rising fuel prices amid Iran conflict

The airline is the first major US carrier to announce capacity reductions tied to rising fuel costs. CEO Scott Kirby said in a staff memo released Friday that the company will reduce capacity by roughly 5 percent, primarily by cutting less profitable routes. He added that the airline is preparing for long-term elevated fuel prices.

"The reality is, jet fuel prices have more than doubled in the last three weeks," Kirby said. "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."

Despite the cuts, Kirby said demand remains strong and that the airline had recorded its "10 biggest booked revenue weeks" in history over the past 10 weeks.

In past downturns, airlines have responded with furloughs or delayed aircraft orders. Kirby said United does not plan to take such drastic measures and will continue taking delivery of roughly 120 new planes this year. He also indicated that the airline is preparing for oil to reach as high as $175 a barrel and to stay above $100 until the end of 2027.

"To be clear, nothing changes about our longer-term plans for aircraft deliveries or total capacity for 2027 and beyond, but there's no point in burning cash in the near term on flying that just can't absorb these fuel costs," he noted.

According to a report by Reuters, Delta Air Lines has indicated it may also trim capacity should fuel prices stay high.

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