United raises fares up to 20%

United Airlines said on April 23 that ticket prices may need to rise 15% to 20% as jet-fuel costs climb. (foxbusiness.com) (usatoday.com) Chief executive Scott Kirby said on the airline’s earnings call that United is trying to recover 100% of the fuel-cost increase “as quickly as possible.” Chief commercial officer Andrew Nocella said sell-in yields for future travel are already up 20% year over year. (foxbusiness.com) United said it has already implemented five broad price increases since January, mostly to offset higher fuel costs. The company said demand has held up despite earlier fare increases and baggage-fee hikes. (foxbusiness.com) The pressure starts with fuel. Chevron chief executive Mike Wirth said on April 27 that jet-fuel supplies in Europe and Asia were tightening quickly after disruptions tied to the Iran war. (foxbusiness.com) Wirth said U.S. jet-fuel prices rose from about $2.50 a gallon before the conflict to $4.19 a gallon as of April 24, citing Airlines for America. He said aviation conditions could get worse in the next few weeks. (foxbusiness.com) Airlines are responding in different ways. Fox Business reported United plans to cut about 5% of planned capacity this year, while Delta Air Lines has trimmed growth plans by roughly 3.5 percentage points. (foxbusiness.com) Low-cost carriers are moving first on schedule cuts. AFP reported on April 28 that Ryanair, Transavia and Volotea were already cutting flights as higher jet-fuel prices squeezed thinner-margin operators. (france24.com) AFP also reported that Air Transat cut 6% of its May-to-October schedule, while AirAsia X said earlier this month that it had cut about 10% of flights and raised fares by up to 40%. (france24.com) For travelers, the immediate effect is higher prices on tickets that have not yet been flown. For airlines, the next test is whether summer demand still holds once fuel surcharges, fare increases and fewer seats all hit at once. (foxbusiness.com) (france24.com)