United Airlines plans to reduce capacity and cut unprofitable routes as it prepares for a prolonged period of high fuel costs driven by geopolitical instability, particularly the conflict involving Iran.
CEO Scott Kirby warned that oil prices could rise to as much as $175 per barrel and remain above $100 through 2027, potentially increasing the airline’s annual fuel bill by $11 billion—more than double its best-ever yearly profit.
In response, United will trim about 5% of its planned capacity in 2026, targeting less profitable off-peak flights and reducing operations at hubs like Chicago O’Hare International Airport. Flights to Tel Aviv and Dubai will also remain suspended. The airline expects to restore full capacity later in the year if conditions improve.
Despite rising costs, strong travel demand has allowed airlines to increase fares, helping offset some of the financial pressure. Like other major US carriers, United is relying on pricing power and capacity discipline rather than fuel hedging to manage the impact of sustained high energy prices.