What happened
- United has three times the cash it had at the start of COVID and the highest credit rating in over 30 years.
- Jet fuel prices have more than doubled in the last three weeks, potentially adding $11B in annual expenses.
- United is planning for oil prices to stay high, assuming they will not return to $100/barrel until the end of 2027.
- The company is cutting flights in the short term but will not furlough employees or defer aircraft orders.
- Demand remains strong, with the 10 biggest booked revenue weeks in history occurring in the last 10 weeks.
- United aims to stay ahead of competitors who may face more stress from higher fuel costs
United Airlines CEO Scott Kirby sent a memo to employees addressing the impact of the conflict with Iran and spike in fuel prices. He outlined a strategy to turn high oil prices into an advantage by leveraging United's strong balance sheet and cash reserves. Key points include: