United Airlines CEO: Expect Higher Ticket Prices Amidst Higher Jet Fuel Prices

Jet fuel prices are continuously rising and have threatened the recovery of airlines. According to United Airlines CEO Scott Kirby, this means bad news for travelers. He said that “Higher jet fuel prices lead to higher ticket prices”. He added that “Ultimately, we’ll pass that through”.

Jet Fuel Prices More Than Doubled Since Last Year

Jet fuel on Tuesday was already at $2.3282 per gallon. That’s up by more than 115% from last year. United predicts that the price of fuel will reach an average of $2.39 per gallon by the fourth quarter. That’s the same time when travel demand is up, especially with loosened international travel restrictions in different countries. During the third quarter, the average price of jet fuel was $2.14 per gallon.

However, even if the airline is dealing with higher fuel costs, United still expects 2022 costs to be lower than 2019.

Kirby said that higher travel demand will usually result in higher fuel prices. On the bright side, an increase in travel demand is good news for the airline industry as it still struggles to recover its losses due to the pandemic.

United announced that it had a $473 million profit during the third quarter. However, one of the things that made it possible for the carrier to gain profit is the $1.1 billion in federal aid.

Vaccine Mandate and Operational Problems

Aside from dealing with high jet fuel prices, US airlines also deal with operational problems. Southwest had to cancel more than 2,000 flights last week. According to Kirby, United didn’t have to deal with similar issues since the carrier “didn’t get out over our skis”.

However, Kirby predicts that the Biden administration’s vaccine mandate could create operational problems for some airlines. American Airlines, Southwest Airlines, and others major airlines announced their vaccine mandate following Biden’s executive order.  However, some airline employees are opposed to the vaccine mandate. Southwest employees this week even had a protest in front of their headquarters in Dallas.

American and Southwest earlier this week announced that unvaccinated staff applying for or have received medical or religious exemptions will not be put on unpaid leave.

United Airlines, on the other hand, announced its vaccine mandate in August before the executive order that forces federal contractors and large businesses to require vaccination among employees.

Kirby said that “Customers can book with confidence on United”.