Airlines Brace for Turbulent Summer as Iran Conflict Drives Up Fuel Costs

United CEO warns of potential $11 billion loss, as airlines pass higher prices to consumers

Mar. 28, 2026 at 3:36pm

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The ongoing conflict in Iran is driving up global oil prices, leading to a significant increase in jet fuel costs and forcing airlines to raise ticket prices. United Airlines CEO Scott Kirby has warned that his company could face an $11 billion loss if oil prices remain at current levels, and the airline is anticipating potential fare increases of up to 20% for passengers. Budget airlines, which operate on thin margins, are particularly vulnerable to these challenges, with some already cutting routes in response to the rising fuel expenses.

Why it matters

The surge in fuel prices is putting immense pressure on the airline industry, which is still recovering from the pandemic-related downturn. Airlines have limited options but to pass these increased costs onto consumers, potentially making air travel less affordable for many. This situation highlights the industry's vulnerability to geopolitical events and the need for airlines to find innovative ways to mitigate the impact of rising fuel prices.

The details

Airlines are employing various strategies to cope with the higher fuel costs, including fuel hedging, route adjustments, and refueling location changes. However, the effectiveness of these measures is limited, and some airlines may be forced to cut unprofitable routes or even face financial instability. California, often referred to as a 'fuel island' due to its lack of pipeline connections, is particularly susceptible to supply weaknesses and higher prices, with jet fuel costing up to $12.72 per gallon at Los Angeles International Airport.

  • As of Friday, Type A jet fuel cost $12.72 per gallon at Los Angeles International Airport, compared to $9.73 in Denver and $11.73 in Miami.
  • United Airlines CEO Scott Kirby has warned that his company could face an $11-billion loss if oil prices remain at current levels.

The players

United Airlines

A major American airline that is facing the potential of an $11 billion loss due to the rising fuel costs.

Scott Kirby

The CEO of United Airlines, who has warned about the potential $11 billion loss and anticipated fare increases of up to 20% for United Airlines passengers.

Spirit Airlines

A budget airline that has recently emerged from its second bankruptcy and has already begun cutting routes in response to rising fuel costs.

Andrew Nocella

The Chief Commercial Officer of United Airlines, who stated that the company is prepared for industry shocks and will adjust pricing to reflect fuel costs.

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What they’re saying

“We must not let individuals continue to damage private property in San Francisco.”

— Robert Jenkins, San Francisco resident

“Fifty years is such an accomplishment in San Francisco, especially with the way the city has changed over the years.”

— Gordon Edgar, grocery employee

What’s next

United Airlines is adjusting its network, cutting unprofitable routes that can no longer cover the higher fuel expenses. The company is also investing in customer experience, recently unveiling the 'United Relax Row,' a new product offering lie-flat space in economy class.

The takeaway

The surge in fuel prices is putting immense pressure on the airline industry, forcing airlines to raise ticket prices and adjust their operations to mitigate the impact. This situation highlights the industry's vulnerability to geopolitical events and the need for airlines to find innovative ways to remain financially stable and provide affordable air travel to consumers.