United Airlines (UAL) warned investors Wednesday that it expects nearly $6 billion in additional fuel expenses this year compared with its estimates at the start of 2026.
A renewed surge in oil prices has placed enormous pressure on the carrier’s third-quarter and full-year profit outlooks, forcing a significant reassessment of costs.
Jet fuel prices at major U.S. airports have risen 34% in July alone, driven by an escalating and deescalating conflict between the United States and Iran, according to Argus data published by Airlines for America.
Jet fuel remains the largest cost for airlines after labor, making the price spike particularly damaging to carriers already navigating a volatile macroeconomic environment.
United said it spent an extra $2.3 billion on fuel in the second quarter, representing an 84% increase compared with the same period a year earlier, with an average price of $4.19 per gallon.
The jet fuel price spike since early July alone has added $575 million to the airline’s expected third-quarter costs, equivalent to $1.12 per share in adjusted earnings.
Despite the fuel headwinds, United posted second-quarter adjusted earnings of $1.99 per share, beating analysts’ estimates of $1.88, as revenue climbed 16% to $17.7 billion.
The Chicago-based carrier recovered about half of the extra fuel costs in the second quarter and expects to recover between 80% and 90% of those costs in the third quarter, with full recovery anticipated in the fourth quarter.
United raised the low end of its full-year profit forecast, now projecting 2026 adjusted earnings of $9 to $11 per share, up from its April forecast of $7 to $11, as the midpoint of $10 compares with the analysts’ average estimate of $10.46 per share, according to LSEG.
For the third quarter, United forecast adjusted earnings of $2.50 to $3.50 per share and an average fuel price of $3.69 per gallon, with guidance based on the Gulf Coast jet fuel forward curve as of July 14.
United said it would exceed the high end of both its third-quarter and full-year earnings forecasts if fuel prices returned to early July levels, underscoring how sensitive its outlook remains to crude oil market movements.
Revenue growth was broad across segments, with premium revenue rising 16%, basic economy revenue up 11%, loyalty revenue growing 11%, and cargo revenue advancing 23% compared with the second quarter of 2025.
The airline is aggressively pursuing high-spending travelers through product innovations including a first-in-the-U.S. “basic business” fare tier, roomier A321XLR economy seating, and a “Relax Row” concept converting seats into beds on 777s and 787s.
Higher airfares have helped United and other carriers offset some of the fuel cost surge, as consumer demand for air travel continues to hold firm across the industry.
Delta Air Lines last week similarly reported strong travel demand even as it raised fares to offset higher fuel costs, signaling that the pricing power of major U.S. carriers remains intact for now.
The price of jet fuel hit a record high of nearly $5 per gallon in April amid the ongoing U.S.-Iran conflict, according to the Argus U.S. Jet Fuel Index, before settling to $3.64 per gallon as of Tuesday.
Shares of UAL fell approximately 2% in extended trading following the earnings release, reflecting investor concern over the scale of the fuel cost challenge ahead.
