United Airlines CEO: Fuel Costs to Impact Results, Travel Demand Steady

• Jet fuel prices have surged 58% since the attacks, rising to $3.95 per gallon, which will have a 'meaningful' impact on Q1 results and potentially Q2 if prices remain elevated
• More than 25,000 Middle East flights have been canceled since the attacks, stranding over a million passengers and forcing major rerouting through alternative hubs
• United is booking over 1,000 passengers daily from Australia and New Zealand to Europe (compared to less than one per day last year) as travelers avoid Middle East airports like Dubai and Doha

Summary: United Airlines CEO on Fuel Costs and Travel Demand

Key Developments:

United Airlines CEO Scott Kirby warned that surging jet fuel prices will have a "meaningful" impact on Q1 financial results, with potential effects extending into Q2. Jet fuel prices have spiked 58% since last Friday, reaching $3.95 per gallon on Thursday, according to the Argus U.S. Jet Fuel Index.

Financial Impact:

Fuel represents airlines' largest expense after labor. United, like most major U.S. carriers, does not hedge fuel costs. Kirby indicated that higher fuel costs will "probably start quick" to affect airfares. However, he noted that hedging the crack spread (the difference between crude oil and refined product prices) is difficult.

Demand Remains Strong:

Despite geopolitical tensions, travel demand shows no signs of weakening. United's booked revenue is up 20% year-over-year, with demand having "not taken even a tiny step back," according to Kirby.

Middle East Conflict Creates New Opportunities:

Over 25,000 Middle East flights have been canceled following recent U.S. and Israeli attacks on Iran. This has created unexpected demand surges for United:

• Daily bookings from Australia and New Zealand to Europe have jumped from less than one per day last year to over 1,000 per day this week
• Customers are rerouting around Middle East airspace closures affecting major hubs like Dubai International Airport and Hamad International Airport in Doha
• Europe has become the strongest booking region globally

United is also in discussions with the Trump administration regarding potential charter flights to evacuate U.S. citizens from the Middle East, though plans remain unconfirmed.

These comments precede the upcoming JPMorgan industry conference where airlines typically provide financial guidance updates.