United Airlines sees elevated fuel costs through 2027, flags margin challenges
UAL•United Airlines expects fuel prices to remain elevated throughout 2027 and says its goal of double-digit pretax margins next year would probably require lower fuel costs, slower industry capacity growth or airlines maintaining higher fares. The carrier expects to recover about 72% of higher fuel costs in the fourth quarter.
1. Fuel costs and margins
United Airlines CEO Scott Kirby said the carrier expects fuel prices to remain elevated throughout 2027. He said reaching the company’s goal of double-digit pretax margins next year would probably require lower fuel costs, slower industry capacity growth or airlines continuing to prioritize higher fares over fuller planes.
2. Recovery targets
United recovered 72% of its additional fuel costs through revenue gains in the third quarter and expects to recover a similar proportion in the fourth quarter, below its previous expectation of full recovery. The company expects to pay about $4.80 a gallon for fuel in the fourth quarter and aims to recover all additional fuel costs through revenue gains in 2027.
3. Capacity and fares
Kirby said industry capacity growth appeared set to accelerate next year, which could weaken airlines’ pricing power. United said investments in products and technology should boost revenue next year, but probably would not be enough on their own to achieve double-digit pretax margins. The airline is reviewing capacity on every flight and in every market and plans to remain flexible with its 2027 schedule.
