United Airlines’ top executive warned ticket prices could jump as much as 20% if oil stays elevated amid the Iran war.
United CEO Scott Kirby told Bloomberg TV on Tuesday that the airline expects consumer backlash and reduced travel demand if ticket prices rise.
“There will be less demand. There’ll be fewer people traveling as prices go up,” Kirby told Bloomberg TV on Tuesday.
“When airfares have to go up because of oil prices, there are gonna be some people that choose not to fly.”
Kirby added that United has already begun adjusting its network in response to rising costs.
“There’s just no point in flying flights that are gonna lose money,” he said, describing cuts to marginal routes that cannot cover higher fuel expenses.
He also outlined the scale of the pressure facing airlines, warning that sustained high oil prices would require significant fare increases.
“That would require prices to be up 20%, to break even to cover that cost,” Kirby said.
Kirby said the airline is planning for oil prices to remain elevated through next year, calling it “reasonable” to expect crude to stay above $100 through 2027.
United, the world’s largest airline by capacity, has previously said it is bracing for a prolonged oil shock, warning prices could spike to as high as $175 a barrel in a worst-case scenario.
United has already cut about 5% of its capacity, trimming unprofitable routes and paring back off-peak flying as fuel costs surge.
Kirby said the situation is “not… a crisis like COVID” but warned it will be “a stress event for the industry.”
He said the airline has built up its balance sheet to avoid furloughs, adding he is committed to “never again” putting employees in that position.
A United spokesperson declined to comment. A spokesperson for Southwest Airlines told The Post that “[f]uel cost and capacity are both material topics that we will discuss [in late April] when we next report financial results.”
The Post has also sought comment from American and Delta.
One expert who spoke to The Post warned that sustained high prices will make it harder for people to travel.
“Airlines are very sensitive to oil prices, and they’re going to pass that on to customers,” Dan Bubb, a professor in residence at UNLV Honors College and former airline pilot, said in an interview with The Post on Tuesday.
“I think what it will eventually do is make people think twice,” Bubb added.
“You may have a family that wants to go on vacation… and now all of a sudden, they’re looking at higher prices. They may decide to go on a closer vacation, closer to home instead of traveling.”
“For business travelers… their companies can handle the expense,” he said. “But… when it comes to recreational travelers, it’s going to make them think twice.”
Bubb warned the ripple effects could be widespread if oil prices remain elevated.
“It’s a perfect storm… that’s just going to really result in a disaster for everybody, including the airlines,” he said.
He added that carriers are likely to respond by cutting back on service, particularly in less profitable markets.
“I think they’re going to cut back on the number of flights,” Bubb said. “The airlines are going to have to take a hard look at all the routes… which ones are the most profitable.”
“That’s going to impact a lot of people,” he added, noting that smaller regional airports could be hit hardest.
Oil prices have surged in recent days as traders grow increasingly skeptical that tensions in the Middle East will ease anytime soon.
International benchmark Brent crude climbed back above $100 per barrel this week, rising more than 4% in Tuesday trading to around $104 after a volatile stretch that saw prices swing sharply.
US crude futures also jumped, trading in the low $90s per barrel.
The rebound followed a steep sell-off earlier in the week, when Brent briefly fell about 11% after optimism over a potential de-escalation.
That optimism quickly faded, however, as conflicting signals from Washington and Tehran cast doubt on any near-term resolution.
Analysts say the market remains on edge over potential supply disruptions, particularly through the Strait of Hormuz — a critical artery for global oil shipments that has been severely impacted by the conflict.
Roughly one-fifth of the world’s seaborne oil supply typically passes through the strait, and any prolonged disruption has the potential to keep prices elevated and volatile, even if diplomatic efforts continue.
Energy market analysts have also warned that repeated attacks on infrastructure in the region could further constrain production and transportation capacity, adding to fears that oil prices may remain higher than earlier this year for an extended period.
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