United Airlines CEO Scott Kirby has warned that the sharp increase in global fuel prices following military strikes involving the United States, Israel, and Iran will have a meaningful impact on the airline’s financial performance this quarter.
Speaking during an event discussing the future of aviation at Harvard’s John A. Paulson School of Engineering and Applied Sciences, Kirby explained that the surge in jet fuel prices represents a significant cost challenge for airlines.
According to industry pricing data, jet fuel prices have jumped 58% since last Friday, reaching $3.95 per gallon by Thursday, dramatically raising operating costs for carriers worldwide.
Jet fuel is typically the second-largest expense for airlines after labor, meaning sudden price movements can quickly influence profitability and strategic planning across the aviation sector.
“If it continues we’ll feel it in Q2 also,” Kirby said while addressing the potential longer-term consequences of the sustained rise in fuel costs.
Airlines Face Limited Protection Against Price Spikes
Unlike some industries that rely heavily on financial hedging strategies to protect against commodity volatility, most major U.S. airlines currently avoid hedging fuel prices.
Kirby noted that fuel hedging has largely fallen out of favor in the airline industry because the complex nature of refining margins makes effective risk management difficult to achieve.
“No one hedges anymore and even if you do, hedging the crack spread is really hard to do,” Kirby said while discussing why airlines remain exposed to sudden fuel price movements.
The crack spread refers to the difference between the price of crude oil and the refined petroleum products produced from it, such as gasoline or jet fuel.
A typical Boeing 737-800 aircraft can hold approximately 6,875 gallons of fuel, illustrating how even modest increases in fuel prices can significantly increase the cost of operating thousands of daily flights.
Travel Demand Remains Resilient Despite Turmoil
Despite the sharp rise in operational expenses and growing geopolitical instability, United Airlines continues to report strong demand for air travel across its global network.
Kirby highlighted that booking trends remain particularly strong, with the airline reporting a 20% increase in booked revenue compared with the same period one year ago.
Demand “has not taken even a tiny step back,” he said, suggesting that travelers continue to prioritize International travel despite concerns about rising costs and regional disruptions.
Kirby also indicated that ticket prices could begin rising soon as airlines attempt to offset higher fuel costs through fare adjustments.
When asked about potential pricing changes, he said the impact on fares would “probably start quick,” signaling that passengers could soon feel the financial effects of the fuel spike.
Middle East Airspace Disruptions Create New Travel Patterns
The conflict has also disrupted global flight routes after widespread airspace closures across parts of the Middle East forced airlines to cancel or divert thousands of flights.
More than 25,000 flights have reportedly been canceled since the attacks began, leaving over a million passengers stranded and creating widespread disruption across global aviation networks.
Major international hubs such as Dubai International Airport and Hamad International Airport in Doha normally act as key transit gateways linking Europe, Asia, Australia, and North America.
However, ongoing airspace restrictions have forced travelers to avoid routes through the region, creating unusual booking patterns for airlines outside the Middle East.
Kirby revealed that United has seen an unexpected surge in bookings from Australia and New Zealand to Europe, routes that traditionally pass through Middle Eastern hubs.
“Each day this week, we have booked over 1,000 people from Australia and New Zealand to Europe. Last year, we booked less than one a day,” Kirby said.
Potential Evacuation Flights Under Discussion
United Airlines is also discussing the possibility of assisting government evacuation efforts as the crisis continues to unfold across the region.
Kirby confirmed that the airline has held preliminary discussions with the Trump administration regarding potential charter flights designed to help American citizens leave the Middle East.
While no formal plans have been finalized yet, such flights could become necessary if the conflict continues to disrupt commercial aviation operations across the region.
Kirby’s comments come shortly before airline executives gather for a closely watched industry conference hosted by JPMorgan, where companies traditionally provide updated financial outlooks for investors.
His remarks offer an early glimpse into how global aviation companies may begin adjusting their forecasts in response to geopolitical tensions, rising fuel costs, and rapidly shifting travel patterns.