United Airlines to Cut More Flights as It Eyes Oil Above $100 Through 2027

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United Airlines is cutting more unprofitable flights over the next two quarters as it prepares for a prolonged period of high jet fuel prices due to the Iran war. The airline is expecting oil to rise as high as $175 a barrel and remain above $100 until the end of 2027, which would increase its annual fuel bill by about $11 billion. Despite the high fuel costs, United says strong travel demand has allowed it to raise fares and offset some of the added expenses.

Why it matters

The war in Iran has pushed airlines into a fresh fuel shock, with jet fuel prices nearly doubling since late February. This is raising costs across the industry and disrupting global flying patterns. United's capacity cuts and fare increases are an attempt to recover part of the added fuel expense, though the airline industry as a whole remains exposed to high fuel prices due to limited hedging.

The details

United Airlines is cutting about 3 percentage points of off-peak flying in the second and third quarters, targeting routes and periods with weaker demand. It will also pull about 1 percentage point of capacity from Chicago O'Hare and keep service to Tel Aviv and Dubai suspended, bringing the total reduction to about 5 percentage points of this year's planned capacity. The airline says it currently expects to restore the full schedule in the fall.

• United is cutting flights over the next two quarters.
• Oil is expected to rise as high as $175 a barrel and remain above $100 until the end of 2027.

What’s next

United says it currently expects to restore its full flight schedule in the fall.