United Airlines slashes flights as Iran war sends fuel prices soaring

United Airlines is slashing flights as soaring fuel prices tied to the Iran war hit U.S. carriers, becoming the first major U.S. airline to announce a cut to capacity after weeks of industry warnings.

United CEO Scott Kirby said in a staff memo released Friday that the airline will cut about 5% of capacity by trimming less profitable routes. He said the company is preparing for a prolonged period of elevated fuel prices, modeling oil at $175 per barrel and expecting it could remain above $100 through the end of 2027.

"The reality is, jet fuel prices have more than doubled in the last three weeks," Kirby said in a statement. "If prices stayed at this level, it would mean an extra $11B in annual expense just for jet fuel. For perspective, in United’s best year ever, we made less than $5B."

Kirby stressed the airline is not panicking and plans to manage the short-term pressure by cutting unprofitable flying while continuing its long-term growth strategy.

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United said the cuts will total about 5 percentage points of its planned capacity, including roughly 3 points from off-peak flying such as midweek and overnight routes, about 1 point from reductions at Chicago O’Hare, and another 1 point tied to suspended service to Tel Aviv and Dubai. The airline expects to restore its full schedule in the fall.

Despite the pullback, Kirby said demand remains strong, noting that the airline has recorded its "10 biggest booked revenue weeks" in its history over the past 10 weeks.

He emphasized that United is not responding to the fuel shock with drastic measures seen in past downturns, such as furloughs or delaying aircraft orders. Instead, the airline plans to continue taking delivery of about 120 new planes this year, including 20 Boeing 787s, with another 130 aircraft due by April 2028, he said.

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"To be clear, nothing changes about our longer-term plans for aircraft deliveries or total capacity for 2027 and beyond, but there's no point in burning cash in the near term on flying that just can't absorb these fuel costs," he said.

The strategy, Kirby said, is to cut unprofitable flying in the near term while continuing to invest in long-term growth.

Other airlines, meanwhile, have so far stopped short of announcing major flight cuts, underscoring how United is among the first U.S. carriers to move from warnings to action as fuel costs surge.

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Delta Air Lines has said it could trim capacity if fuel prices stay elevated, according to Reuters, while other major U.S. carriers have so far relied on fare hikes to offset rising costs.

International carriers have moved faster, with airlines including Qantas, Scandinavian Airlines and Thai Airways raising prices, and Air New Zealand canceling more than 1,000 flights, according to earlier reports.