demand has allowed U.S. carriers to raise fares. Chief Executive Scott Kirby said in a staff memo last Friday that the airline is preparing for oil to rise as high as $175 a barrel and remain above $100 until the end of 2027. At those levels, United’s annual fuel bill would rise by about $11 billion, more than twice the profit it earned in its “best year ​ever,” he said.

The war in Iran has pushed airlines into a fresh fuel shock. Jet fuel prices have nearly doubled since late February, raising costs ​across the industry and disrupting global flying patterns through reroutings and airspace restrictions. Still, U.S. carriers have so far been able to ⁠push through fare increases, helped by resilient travel demand and tighter capacity. “There’s a good chance it won’t be that bad,” Kirby wrote of the airline’s fuel assumptions. “But…there isn’t ​much downside for us to preparing for that outcome.” United had already begun trimming less profitable flights, including some midweek, Saturday and overnight service. In the staff memo ​shared by the company, Kirby said the airline would cancel about three percentage points of off-peak flying in the second and third quarters, targeting routes and periods with weaker demand.

It will also pull about one percentage point of capacity from Chicago O’Hare and keep service to Tel Aviv and Dubai suspended, bringing the total reduction to about five percentage points of this year’s planned ​capacity. Kirby said that United currently expects to restore the full schedule in the fall. The latest cuts build on Kirby’s comments earlier this week that the airline would rather ​leave some demand unmet than keep flying routes that lose money if fuel stays high. (Reuters)