United Sees Opportunity in High Oil Prices, Plans Capacity Cuts

Airline CEO Scott Kirby believes United is well-positioned to weather the storm and potentially gain market share from competitors.

Mar. 21, 2026 at 11:07am

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United Airlines CEO Scott Kirby has sent a memo to employees addressing the challenges posed by high oil prices and the conflict with Iran. Kirby believes United is in a strong financial position to manage the situation, with plans to cut capacity by 5% in the short term while continuing to invest in the airline's long-term growth. Kirby is optimistic that United can use this environment to its advantage, citing the airline's solid cash balance, industry-leading profit margins, and strengthened balance sheet.

Why it matters

The airline industry is facing significant headwinds due to the spike in fuel prices, but United's approach highlights how a well-capitalized carrier can potentially turn a crisis into an opportunity. Kirby's confidence in United's ability to weather the storm and potentially gain ground on competitors is a notable contrast to the "wait and see" approach he says some rivals are taking.

The details

In his memo, Kirby outlined several steps United is taking, including planning for oil prices to reach $175 per barrel and not fall back to $100 per barrel until the end of 2027. The airline is tactically pruning about 5% of its capacity in the second and third quarters, primarily by cutting non-peak flying and suspending service to Tel Aviv and Dubai. However, Kirby stressed that United will not engage in cost-cutting or defer investments in the future, and will instead "double down" on opportunities to strengthen the airline, such as expanding its technology lead and making infrastructure improvements.

  • United is cutting about 3 points of flying in off-peak periods (redeyes, Tues/Wed/Sat) during Q2 and Q3 2026.
  • United is pulling 1 point of capacity at its Chicago (ORD) hub when the FAA process concludes.
  • United has suspended service to Tel Aviv (TLV) and Dubai (DXB), representing about 1 point of capacity.

The players

Scott Kirby

The CEO of United Airlines, who has outlined an optimistic strategy for the airline to navigate the current challenges posed by high oil prices.

United Airlines

A major U.S. airline that is taking a proactive approach to managing the impact of high fuel costs, including tactical capacity reductions while continuing to invest in the airline's long-term growth.

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What they’re saying

“We have the financial firepower to continue to stay focused on the long term. We will continue full speed ahead to take delivery of about 120 new aircraft this year, including 20 new 787s, and will take another 130 new aircraft by April 2028.”

— Scott Kirby, CEO, United Airlines

“I'm typing this as my 12-year-old son Sean cheers for his teams in his March Madness Bracket. And there's a part of me that can't help but feel United is playing offense right now with potentially big rewards at the end.”

— Scott Kirby, CEO, United Airlines

What’s next

United plans to restore its full flight schedule this fall, once the short-term capacity reductions are lifted.

The takeaway

United's approach highlights how a financially strong airline can leverage a challenging environment to its advantage, investing in growth and technology while competitors retrench. Kirby's confidence in United's ability to weather the storm and potentially gain market share from rivals sets the airline apart in the current climate of uncertainty.