United Airlines CEO says to expect higher fares as jet fuel prices rise

Jet fuel prices are rising to ranges not seen since earlier than the Covid pandemic and it is set to drive up airfares, United Airlines CEO Scott Kirby mentioned Wednesday.

“Higher jet-fuel prices lead to higher ticket prices,” Kirby informed CNBC’s “Squawk on the Street.” “Ultimately, we’ll pass that through.”

United forecast common fuel prices of $2.39 a gallon within the fourth quarter, when it expects a surge in bookings from the end-of-year holidays and lately loosened worldwide journey restrictions. That’s up from $2.14 a gallon within the third quarter and the $2.02 on common it paid within the fourth quarter of 2019.

Kirby mentioned higher demand normally drives fuel prices up. The improve in demand is a welcome development for an trade that continues to wrestle to return to profitability.

United posted a $473 million profit for the third quarter, thanks to $1.1 billion in federal support, although a surge in delta-variant circumstances of Covid-19 weighed on its backside line. The Chicago-based airline reiterated that it expects its 2022 prices, excluding fuel to be decrease than 2019.

The firm’s shares had been up greater than 1% in morning buying and selling Wednesday.

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