United Airlines (UAL) CEO Scott Kirby said Thursday that rising jet fuel prices will have a “meaningful” impact on first-quarter results, even as travel demand remains robust.
The comments highlight how geopolitical tensions and energy price volatility can quickly affect airline profitability, even when passenger volumes stay strong.
Key Takeaways
- Jet fuel prices surged 58% since last Friday
- Travel demand shows no signs of weakening
- Australian routes seeing increased bookings from Middle East disruptions
Fuel Cost Surge Pressures Margins
Jet fuel prices have jumped to $3.95 per gallon, according to the Argus U.S. Jet Fuel Index, following recent U.S. and Israeli military actions against Iran 1. The 58% weekly increase represents airlines’ biggest expense after labor costs.
Kirby said the fuel spike will impact second-quarter results if prices remain elevated 2. The airline industry typically passes higher fuel costs to consumers through fare increases, though this process can take several weeks or months.
Demand Resilience Despite Geopolitical Tensions
Despite the fuel price shock, Kirby emphasized that travel demand “hasn’t taken even a tiny step back” 1. The CEO noted increased bookings from regions like Australia, where travelers are avoiding Middle East airspace due to ongoing conflicts.
This demand strength contrasts with historical patterns where geopolitical events typically dampen travel appetite. The resilience suggests pent-up travel demand remains robust following the pandemic recovery.
Market Context and Competitive Pressure
United faces additional operational challenges beyond fuel costs. The Federal Aviation Administration scheduled a meeting this week regarding capacity constraints at Chicago O’Hare, where United has significantly increased flight operations 3.
The airline also continues contract negotiations with its flight attendants union, adding to cost pressures. These multiple headwinds come as United attempts to maintain its competitive position against rivals like Delta and American Airlines.
Industry-Wide Impact Expected
Cowen analyst Tom Fitzgerald noted that “fuel shocks will pressure earnings” across all U.S. carriers, though Middle East exposure remains modest 3. Historical precedent from 2022 showed earnings per share declines following fuel spikes, followed by recovery as airlines adjusted pricing.
The current situation differs from past fuel crises due to the specific nature of Middle East airspace restrictions, which are forcing route adjustments and creating uneven demand patterns across global markets.
Not investment advice. For informational purposes only.
References
1CNBC (March 6, 2026). “United CEO Scott Kirby says higher airfare could be ahead after fuel price spike”. LinkedIn. Retrieved March 6, 2026.
2CNBC (March 6, 2026). “United Airlines CEO: Fuel spike will hit results, but travel demand hasn’t taken ‘even a tiny step back'”. X (formerly Twitter). Retrieved March 6, 2026.
3Ted Reed (March 2, 2026). “United Airlines Faces A Demanding Week. Higher Fuel Prices Won’t Help”. Forbes. Retrieved March 6, 2026.