United raises fares up to 20%

United Airlines said on April 23 that fares may need to rise 15% to 20% as jet-fuel costs surge and summer bookings get repriced. (foxbusiness.com) Chief Executive Scott Kirby said on the airline’s earnings call that United is trying to recover 100% of the increase in jet-fuel prices “as quickly as possible.” Chief Commercial Officer Andrew Nocella said sell-in yields for future travel are now up 20% from a year earlier. (foxbusiness.com) (finance.yahoo.com) United said it had already pushed through five broad fare increases since January, and executives said demand was still holding after earlier fare and baggage-fee hikes. Chief Financial Officer Michael Leskinen said United believes brand-loyal customers will keep paying higher fares. (foxbusiness.com) (finance.yahoo.com) The fuel squeeze is wider than one airline. Chevron Chief Executive Mike Wirth said on April 27 that jet-fuel supplies were already seasonally low before the Iran conflict and are tightening quickly in Europe and Asia. (foxbusiness.com) Fox Business, citing Airlines for America, said U.S. jet-fuel prices climbed from about $2.50 a gallon before the conflict to $4.19 as of April 24. Fuel typically makes up about a quarter of airline operating costs, leaving carriers exposed when prices jump this fast. (foxbusiness.com) United is also trimming supply. Fox Business reported the airline plans to cut about 5% of its planned capacity this year, while Delta Air Lines has reduced growth plans by roughly 3.5 percentage points. (foxbusiness.com) Low-cost carriers are cutting first. An AFP report published April 28 said Ryanair, Transavia and Volotea were reducing flights, while Air Transat cut 6% of its May-to-October schedule and AirAsia X said it was cutting more flights and some connections. (economictimes.indiatimes.com) That split reflects how airlines buy fuel. Euronews, citing Reuters reporting, said carriers with fuel hedges such as Lufthansa and Ryanair locked in part of their supply at fixed prices, while unhedged airlines have had less protection as oil and jet-fuel costs climbed. (euronews.com) United’s message to travelers is straightforward: if fuel stays high, fares likely stay high too, even if planes keep filling. (foxbusiness.com)