United Airlines CEO warns that ticket prices will increase because jet fuel is getting more expensive
Tayfun Coskun/Anadolu Agency via Getty Images
- United Airlines CEO said that customers can expect ticket prices to increase.
- United's jet fuel prices are up by about 6% compared to last year, according to their third quarter results.
- Airline travel has significantly increased since the start of the pandemic causing the price of jet fuel to increase with demand.
United Airlines CEO Scott Kirby said that customers can expect ticket prices to increase as the cost of jet fuel rises.
Oil prices have climbed to their highest level in about seven years, and travel has rebounded from a deep coronavirus pandemic slump, and that means higher jet fuel prices.
"Higher jet-fuel prices lead to higher ticket prices," Kirby said in an interview on CNBC. "Airfares are going to come back from the really, really low levels they got to during the pandemic, but air travel is going to remain a great bargain."
United's jet fuel prices are up by about 6% compared to last year, according to their third quarter results. The airline spent on average $2.14 per gallon in the third quarter and expects to spend about $2.39 per gallon in the fourth quarter.
The average cost of a domestic, round-trip flight in 2021 so far is $260, a decrease from the average cost in 2020 of $292. Comparatively, the average round-trip flight in 2019 cost about $355, according to the Bureau of Transportation Statistics.
United did not have further comment about the potential fare increases.
US airlines reported 62.5 million originating passengers from April to June of this year compared to 2020 which saw 11.5 million originating passengers, according to the Bureau of Transportation Statistics.
Airline passengers can expect full planes ahead of holiday season travel, Kirby said. United, which is planning on December being its busiest month, has scheduled over 3,500 flights daily domestic departures for holiday travel. December will be United's largest domestic schedule since 2019, Insider reported.
Those traveling for Thanksgiving can expect domestic airfare of around $300 for a round-trip flight, which is up 23% from 2020 and down 11% from 2019, according to Hopper. For Christmas, domestic airfare costs are near levels that haven't been seen since 2018, Hopper reported. $390 is the average cost of a round-trip flight this Christmas which is up 55% from 2020, according to Hopper.
from Business Insider https://ift.tt/2ZecsET
No comments