Average U.S. fuel prices are expected to rise further as the U.S.-Israel conflict with Iran drags on, raising the likelihood that higher fuel costs could soon push up airline ticket prices, United Airlines CEO Scott Kirby said Thursday.
"It will probably start quick," Kirby told CNBC when asked when rising fuel costs could begin affecting airfares. "If it continues, we'll feel it in Q2 also."
Kirby made the remarks after speaking at Harvard University's John A. Paulson School of Engineering and Applied Sciences, where he discussed the future of air travel.
Fuel is among the most significant expenses for airlines, meaning increases in energy prices can quickly ripple through the industry.
Jet fuel accounts for roughly 25% to 30% of an airline's operating expenses, making it the second-largest cost for carriers after labor, according to the International Air Transport Association.
When fuel prices climb, airlines often adjust ticket prices or add surcharges to offset the higher costs. The timing and size of those increases can depend on factors such as travel demand, competition on routes, and how long fuel prices remain elevated.
Kirby suggested that if current energy market pressures persist, airlines could begin feeling the financial effects during the second quarter, a period that typically coincides with rising demand ahead of the summer travel season.
Energy markets have been volatile in recent days as tensions escalate in the Middle East, raising concerns about potential disruptions to global oil supplies and pushing fuel prices higher.
Higher diesel prices can also signal broader increases across fuel markets, including jet fuel, which airlines burn in large quantities daily.
For carriers, sustained increases in fuel prices can significantly affect operating margins. Airlines sometimes attempt to blunt the impact through fuel hedging strategies or operational efficiencies, but prolonged increases typically make their way into consumer prices.
Kirby did not specify how much airfares might rise but said the industry's response will depend largely on whether fuel prices stabilize or continue climbing in the coming weeks.
The Middle East crisis has sent prices for all fuels soaring in tandem with oil, posing a major risk to U.S. President Donald Trump and his Republican Party ahead of midterm elections in November. Inflation is set to be a key concern of voters, with many across the country struggling to keep up with rising costs.
Average U.S. retail gasoline prices hit the $3-a-gallon mark for the first time since November on Monday. Gasoline futures reached $2.54, the highest since July 2024.
Reuters contributed to this report.
Solange Reyner ✉
Solange Reyner is a writer and editor for Newsmax. She has more than 15 years in the journalism industry reporting and covering news, sports and politics.
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