By Guy Birchall

United Airlines may have to raise ticket prices by up to 20 percent to offset the spike in jet fuel costs driven by the ongoing war in Iran, the company revealed on April 22.

The airline’s CEO, Scott Kirby, announced the move to investors during a quarterly earnings call, saying the company’s goal “is to do whatever it takes to recover 100 percent of the increase in jet fuel prices as quickly as possible.”

“Yields need to increase by about 15 percent to 20 percent,” Kirby said, adding the company is assuming fuel prices could remain elevated for longer, according to a transcript of the call published on financial commentary and analysis site Seeking Alpha.

“Realistically, there probably isn’t enough time to make up 100 percent of the fuel price increase this year. But I feel very good about 100 percent recovery and getting to double-digit margins in 2027.”

United said it has already begun raising prices, implementing five fare increases late in the first quarter along with higher baggage fees, which have started to offset rising fuel costs.

Kirby added that the airline has not yet seen a drop in demand, even as prices rise, but acknowledged that higher fares would eventually try consumers.

The surge in jet fuel prices has prompted multiple airlines worldwide to take mitigation measures, including cutting flights and raising prices.

This week, Canadian airlines Air Transat and WestJet both announced they were scaling back flight capacity due to rising aviation fuel costs.

Transat A.T. Inc., the travel company that owns Air Transat, says it is cutting capacity by 6 percent from May through October, which covers the crucial summer travel season. It has also announced plans to reduce flight frequencies on some routes to Europe and the Caribbean, and to extend its suspension of service to Cuba, in response to ongoing volatility in energy markets and fuel supply constraints in certain regions.

WestJet also announced capacity reductions of approximately 1 percent in April, 3 percent in May, and nearly 6 percent in June.

Last week, Air Canada said it would stop flying to New York City’s John F. Kennedy International Airport and raise baggage fees on some flights because of rising fuel costs.

Earlier this month, American Airlines said it would raise checked baggage fees and tighten some economy class benefits as part of the carrier’s “continuing evaluation of pricing in light of the current operating environment.”

American Airlines’ move followed similar fee increases by Delta Air Lines, JetBlue, Southwest Airlines, and United Airlines in response to the surge in fuel costs.

On the other side of the Atlantic, German flag carrier airline Lufthansa announced on April 21 that 20,000 short-haul flights would be canceled this summer because of the ongoing fuel crisis.

Lufthansa said in a statement that the flights “will be removed from the schedule through October, equivalent to approximately 40,000 metric tons of jet fuel, the price of which has doubled since the outbreak of the Iran conflict.”

The carrier said the changes will reduce the number of “unprofitable short-haul flights” across its network and will be implemented at Lufthansa Group’s six hubs in Brussels, Munich, Rome, Vienna, Zurich, and Frankfurt, Germany.

The first flight cancellations were implemented on April 20, effective through the end of May, and medium-term route planning for the period from June onward will be published in late April or early May.

Further afield, Virgin Australia said last week it would raise fares, and Australian carrier Qantas Airways said last month it would increase fares on its international routes in response to the surge in jet fuel costs.

Similarly, Air New Zealand announced in March broad price increases and plans to cancel about 1,000 flights.

European Jet Fuel Supplies

International Energy Agency (IEA) Executive Director Fatih Birol said on April 16 that Europe has “maybe 6 weeks or so of jet fuel left,” due to supply issues caused by the ongoing U.S.–Israeli war with Iran.

Briol warned that flight cancellations could occur soon if oil flows remain stymied by the restrictions in the Strait of Hormuz, through which a fifth of the world’s oil passes.

If the Strait of Hormuz isn’t reopened, he said that for Europe, “I can tell you soon we will hear the news that some of the flights from city A to city B might be canceled as a result of lack of jet fuel.”

Victoria Friedman and Jennifer Cowan contributed to this report.