United Airlines is bracing for a major surge in energy costs due to escalating geopolitical tensions in the Middle East. CEO Scott Kirby informed employees in an internal memo that the airline is planning for oil prices to reach $175 per barrel and does not expect them to fall below $100 per barrel until at least the end of 2027. He added that the situation “might not be as bad” as projected but emphasized the need for proactive measures.
To offset the impact of skyrocketing jet fuel costs, United is reducing approximately 5% of its planned capacity for the second and third quarters of 2026. This includes scaling back red-eye flights and off-peak services on Tuesdays, Wednesdays, and Saturdays, pausing routes to Tel Aviv and Dubai, and implementing a 1% capacity cut at Chicago O’Hare (ORD). CEO Kirby described these adjustments as “tactically pruning” temporarily unprofitable flights to protect the company’s bottom line.
The financial stakes are enormous. Kirby warned that if oil prices remain at these levels, United’s annual fuel bill could reach $11 billion, more than double the airline’s total profit during its best-performing year. Despite this grim forecast, United is not planning to furlough employees or defer its 2026 order of 120 new aircraft, signaling a commitment to “playing offence” rather than retrenching.
For passengers, the immediate consequences are fewer available seats and rising ticket prices, which have already increased by 15%–20% over the past week. Kirby noted that continuing to operate flights that cannot absorb the higher fuel costs would be financially unwise. While travel demand remains strong, the outlook suggests that the era of low-cost flights may be over for the foreseeable future, with high fuel prices expected to persist through 2027.
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