United Airlines has announced that it will increase ticket prices by 15 to 20% to offset rising fuel costs and preserve its profit margins.
The decision comes in the wake of soaring oil prices driven by the conflict in Iran, prompting United to pass these additional expenses onto customers. The airline recently reported its quarterly earnings and revised its annual profit forecast downward.
Additionally, United plans to cut flight capacity by 5% this year as part of its response to current market challenges.
Chief Executive Scott Kirby described oil prices as “incredibly volatile” and stated that the airline anticipates jet fuel costs to remain high for longer than initially expected.
So far, the company has not observed a decline in demand due to increased ticket prices. However, should demand weaken next year, United may consider further reductions to its flight schedule.
During its first-quarter earnings report on Tuesday, United revealed stronger revenue figures, but lowered its net profit projections for 2023, citing the surge in oil prices.
Several other airlines have already announced similar measures, including price hikes and reduced capacity, in response to higher fuel costs following the 28 February attack on Iran by the United States and Israel.
On 17 April, the International Air Transport Association (IATA) urged authorities to implement a “well-coordinated plan” in the event of jet fuel rationing.
