May 20, 2022

United Airlines CEO Scott Kirby has warned that ticket prices are likely to rise due to the continued increase in jet fuel costs.

“Higher jet fuel prices lead to higher ticket prices,” said Kirby, speaking to CNBC. “Ultimately, we’ll pass that through.”

Despite solid consumer demand, rising fuel prices have proved difficult for the aviation industry to absorb. Last week Delta Air Lines warned of a fourth quarter pre-tax loss, suggesting it too may have to pass higher costs on to consumers.

Jet fuel prices are rising to levels not seen since the start of the Covid-19 pandemic. United’s predicted average fuel cost is $2.39 a gallon in the fourth quarter, up from $2.02 during the same period in 2019.

The aviation industry can expect the usual surge in end-of-year bookings coupled with an additional boost as many finally put delayed plans into action following the relaxing of Covid travel restrictions, with increased demand likely to contribute to rising fuel costs. Furthermore, a predicted global energy crunch, should it come to pass, will drive demand for oil and therefore prices.

United posted third quarter profits of $473m, helped in no small part by the $1.1bn the firm received in federal aid. Shares of the company were down nearly 1% in afternoon trading following the announcement.