United Airlines will bump fares 15% to 20% this summer, its busiest season — letting travelers foot the bill for the airline’s jet fuel costs that have doubled as a result of the Iran war.
The decision was made as travelers have shown they are still willing to pay top-dollar to fly, United Airlines CEO Scott Kirby said on CNBC Wednesday.
Jet fuel, which is airlines’ biggest expense behind labor, has doubled since the war with Iran began, he said.
United still reported higher profits last quarter than it earned a year earlier, beating Wall Street expectations.
In the first quarter United was able to recapture 40% to 50% of the increased fuel costs due to a high demand for tickets, Kirby said.
United Airlines is also cutting the number of flights planned this year to reduce costs. Lower capacity can drive up airfares with fewer seats on the market, CNBC reported.
“Demand is incredibly strong right now,” Kirby told Bloomberg in a separate interview, adding that he predicts oil prices will not stay “higher for longer.”
