United Airlines is reducing capacity by 5% and is preparing for an extended period of high fuel costs, Chief Executive Officer Scott Kirby said in a memo to employees late on Friday.
Like other U.S. carriers, United Airlines is feeling the effect of high oil prices, which have more than doubled so far this month.
“We are canceling about 3 points of flying in off-peak periods during Q2 and Q3, and we’ll pull a point of capacity in ORD when the FAA process concludes,” Kirby said. These off-peak flights include redeyes and flights on Tuesdays, Wednesdays, and Saturdays. The airline’s cuts at Chicago O’Hare are related to a flight cap by the FAA, putting a stop to an arms race between it and American Airlines at the airport.
Its war-related cuts at Tel Aviv and Dubai represent another 1%.
Unlike United, rival carriers Delta Air Lines and American Airlines haven’t made capacity cuts yet. However, both have remained cautious of the environment, as it rethinks its fares and considers extra liquidity.
“We’re ready, we have a plan, and we’re going to continue executing that plan,” Kirby added. The Chicago-based carrier expects to restore the capacity cuts by the end of the year.
Related: American Weighs Widebody Order, Extra Liquidity Amid Cost Volatility
Despite the uncertain environment, the surge in fuel costs has been absorbed by strong demand.
“The 10 biggest booked revenue weeks in our history have been the last 10 weeks,” Kirby said. This is a similar trend to that seen by other U.S. carriers, which have all had many of their biggest revenue weeks this quarter.
While demand is strong today, the question remains as to how consumers will respond down the road in the case that fuel costs remain elevated.
“Our plans assume oil goes to $175/barrel and doesn’t get back down to $100/barrel until the end of 2027,” Kirby explained. While the airline doesn’t necessarily expect that to be the case, Kirby states that there “isn’t much downside” to preparing for such an outcome, and is looking to capitalize as the airline looks for opportunities “…down the road to buy assets and absorb network changes.”
United will continue to expand its fleet, expecting deliveries of 120 aircraft this year. This includes 20 new Boeing 787s, which include the airline’s newest “Elevated” interiors featuring Elevate Ascent business class seats along with the Polaris Studio product.
An additional 130 aircraft deliveries are expected by April 2028.
All photos taken by the author.
