United Airlines CEO Scott Kirby anticipates gradual fare increases in the first half of 2027, citing persistently strong travel demand. He noted that while fares are rising, they remain below pre-pandemic levels after adjusting for inflation, aiming for a normalized level that allows for reinvestment.
The comments from United's CEO signal continued strength in the travel sector and potential for increased costs for consumers, while also indicating the industry's ability to manage rising operational expenses through demand.
United Airlines CEO Scott Kirby indicated on Tuesday that he anticipates a gradual increase in airfares during the first half of 2027, though the rise is expected to be less significant than observed this year. Kirby attributed this outlook to persistently strong travel demand, stating that the airline has not experienced any meaningful weakening.
According to data from the Labor Department, U.S. airline fares had risen 25.5% in July compared to the previous year and were nearly 25% higher on average from April through July. However, Kirby noted that, after adjusting for inflation, current airfares are still approximately 13% below pre-pandemic levels. He expressed a goal of returning to normalized fare levels that would enable airlines to achieve sufficient profitability for reinvestment.
Kirby also linked the robust demand to United's capacity to offset rising fuel costs. Despite jet fuel prices nearing $4 a gallon, he suggested that the strong demand would likely enable the company to recover 100% of higher fuel costs in the fourth quarter of 2026. Furthermore, Kirby mentioned that aircraft deliveries are largely proceeding as planned, following earlier-than-anticipated supply-chain challenges.