A United Airlines aircraft taxis at San Francisco International Airport in California on January 20. Justin Sullivan/Getty Images
The war in Iran is causing jet fuel prices to soar, yet travelers have shown their determination. Customers are ready to spend more on flights – consequently, airlines are transferring more expenses to them.
United Airlines CEO Scott Kirby stated Wednesday that robust booking demand this summer has enabled the airline to increase fares by 15% to 20% during the peak travel period.
In remarks made to CNBC on Wednesday, he attributed part of the rise to the doubling of jet fuel prices since before the conflict in Iran. Fuel ranks as the second highest expense for airlines, just after labor.
Despite increased expenses, United reported greater profit last quarter compared to the same period last year.
Kirby stated that in the first quarter, United managed to recover 40% to 50% of the rising fuel expenses. He anticipates that he can increase fares sufficiently to cover all those expenses later this year due to robust demand for its tickets.
“Eventually, that will lead to lower demand,” he stated. “We honestly haven’t observed it in our reservations thus far.” “Reservations are extremely robust.”
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