United CEO Says Fuel Prices to Dip but Airfares Will Stay High
United Airlines CEO Scott Kirby said on CNBC that oil prices are expected to decline gradually into 2027, but they will remain above historical levels. He indicated that strong demand allows the carrier to pass on higher fuel costs to passengers. This year, airfares have risen more than 20% to offset fuel expenses.
Kirby's comments came as United announced a slate of new international routes from its Newark hub, signaling continued expansion despite elevated operating costs. The carrier's strategy hinges on sustained consumer demand, which has so far absorbed fare increases exceeding 20 percent this year. However, the article notes that both United and American are planning double-digit capacity growth, a factor that could eventually pressure pricing power if supply outpaces demand. Fuel costs, driven upward by the Iran war, remain the primary variable in airline profitability, though Kirby's outlook suggests fares may stay elevated even as oil prices moderate.
Sustained high airfares could reshape travel behavior across income brackets, potentially pricing casual travelers out of the market while premium and business segments remain resilient. Families and budget-conscious leisure travelers may face difficult trade-offs, reducing trip frequency or choosing alternative transportation. If capacity growth outpaces demand as the article suggests, airlines could eventually be forced to lower fares, which would benefit consumers but squeeze carrier margins. The balance between fuel costs, demand, and capacity will likely determine whether air travel becomes more exclusive or returns to broader accessibility over the next several years.