United still expects to fully pass on fuel costs to travelers
United's CFO says the airline expects to fully recover higher fuel costs by year-end, citing rising demand for premium seating.
United Airlines CFO Michael Leskinen told the Morgan Stanley Laguna investor conference that the carrier still expects to fully recover recent jet fuel cost increases by year-end, despite the recent spike in fuel prices.
He explained that there is a lag in this process, since roughly 35% of fourth-quarter tickets are already booked and cannot be repriced. "There is nothing that is changing that causes us to not be able to pass" costs through, he said.
His comments align with CEO Scott Kirby's view that fuel prices will remain elevated, but that airlines will be able to pass costs through to consumers by 2027.
United points to growing consumer willingness to pay for premium experiences, a trend also seen in hotels and cruises. The carrier has ordered more than 250 aircraft with additional lie-flat business seats, plans new A321XLR routes to less popular European destinations, and will equip 1,000 aircraft with Starlink by year-end, while also planning cuts to marginally profitable routes. American Airlines has signaled similar capacity adjustments and slower growth for 2027.