United Airlines CEO Scott Kirby said airfares have increased because all operating costs have risen since the Covid pandemic [1].
This shift reflects a broader trend in the aviation industry where airlines are passing the burden of inflation and supply chain disruptions to passengers. As operating expenses climb, the cost of travel remains elevated regardless of passenger demand.
Speaking during an interview on CNBC’s “Squawk Box” in July 2024, Kirby said the airline is facing a higher cost base across several key areas [1]. He specifically highlighted a surge in jet-fuel prices, along with increased labor and maintenance expenses, as primary drivers of the price hikes [1].
"Airfares are higher because all costs are up post‑Covid," Kirby said [1].
Fuel remains one of the most volatile expenses for the carrier. The company expects approximately $6 billion in additional fuel costs this year due to high oil prices [2]. Despite this projected expenditure, Kirby said the company's outlook on oil is slightly more optimistic than previous forecasts [3].
"We’re not expecting oil prices to be as high as we feared," Kirby said [3].
While the company manages these costs, the impact on the consumer is direct. The combination of labor contracts and the price of jet fuel creates a floor for ticket pricing that prevents fares from returning to pre-pandemic levels. Kirby's comments suggest that the airline views these increases as a necessary reaction to a permanently altered economic environment for aviation [1].
“"Airfares are higher because all costs are up post‑Covid."”
The airline industry is transitioning from a recovery phase into a new economic reality where structural costs—specifically labor and fuel—are significantly higher than they were before 2020. By attributing fare increases to these systemic costs, United Airlines is signaling that lower ticket prices are unlikely to return as long as the cost of operations remains elevated.
