During the J.P. Morgan Industrials Conference, United Airlines’ executives detailed how the airline will deal with the rising fuel prices, affirming that while the revenue environment is strong, it is taking a more careful approach not to leave itself too exposed if the conflict in Iran, and consequently high fuel prices, continue.
Offsetting rising fuel prices
On March 17, 2026, the carrier’s C-level executives appeared at the J.P. Morgan Industrials Conference. At the event, Scott Kirby, the Chief Executive Officer (CEO) of United Airlines, echoed statements made by his competitors, affirming that “the revenue environment is really strong” right now, even if the price of oil has spiked and has continued to stay at elevated levels, as the conflict in Iran has continued.
Kirby said the airline has a “goal this year to fully offset the increase in fuel prices,” detailing that there is a potential $4.6 billion revenue gap that needs to be offset. To achieve that, United Airlines needs to improve its unit revenue by another 8.5%.
Will it be able to do so?
The carrier’s CEO said that so far this year, it had the 10 biggest booking weeks in its history. “There [have] only been 10 weeks this year, and they aree number one through 10, which is pretty remarkable,” Kirby stated, noting that booked yields are running up between 15% and 20% in the past week.
However, year-on-year (YoY), that is only a 5% compounded annual growth rate (CAGR), and if you zoom out even more, “from 2019 through 2025, inflation in the US was up over 25%. Airfares were down 2%, so we’re 27 points behind.”
Looking at the data, Kirby said there is a case to be made that United Airlines will be able to offset 100% of the increase in jet fuel prices.
“The question becomes, though, what in that environment where we still do feel really good, is there anything that we should be doing differently?”
Kirby explained that you can make two strategic choices: either assume this is only a short-term disruption or prepare proactively if jet fuel prices remain high.
“I would much rather make the mistake of leaving a couple of months’ worth of demand on the table because we cut more, and then you can get it back, as opposed to making the mistake of oil prices staying higher and longer, and you are flying flights that lose cash.”
The CEO noted that last week, it had slashed some capacity in May and June. According to Cirium’s Diio Mi, in June, for example, United Airlines’ domestic capacity, measured in available seat kilometers (ASKs), is up 7.7% YoY. Yet last week’s schedules showed that ASKs were up 8.6%.
International ASKs are up 1% YoY.
“I think what all this means is the other thing that’s gonna happen, particularly where this gets really interesting, is if fuel prices stay higher for longer. That is really where it gets interesting.”
Growing margins
Nevertheless, Kirby was confident that if elevated fuel prices last longer, it would get the airline beyond single-digit margins and “into the mid-double digit range by the time it ends, if it does go for longer.”
How?
If higher jet fuel prices persist, it is going to “further accelerate the gap between the brand loyal airlines and everyone else,” Kirby explained.
“It will also lead to kind of the structural changes in the industry much more rapidly that I think gets us into the mid-double digit margin range.”
Andrew Nocella, the Chief Commercial Officer (CCO) of United Airlines, chimed in that, on transatlantic flights, for example, consumers’ behavior has not changed, and that demand is strong.
Kirby also pointed out that since no US major airline has hedged its fuel, it makes it “the natural hedge, and that is that we pass through to the consumer as the price of fuel rises.”
Delta Air Lines, which some C-level executives have dubbed the other brand-loyal airline, also believes it can use the current situation to expand its margins.
At the same event, Ed Bastian, the CEO of the airline, said that it sees “meaningful opportunity to continue to grow our margins, to expand our cash returns, and to leverage that strong balance sheet that we've had to increasingly use flexibility, both investing on offense and continuing to be shareholder friendly with our returns.”
According to Bastian, it is “not that something unusual or difficult happens, it's how you respond to it.”
“[…] those at the higher end, the premium end, it's going to, I think, shift – continue to shift people to being with a more resilient carrier, both whether it's for brand strength, whether it's our ability to price when it's appropriate for – to recover your cost.”
Rytis Beresnevicius
