Oil could hit $175 a barrel, says United Airlines boss

Core Viewpoint - United Airlines is implementing fuel-saving measures in anticipation of a potential 60% increase in oil prices, which could reach $175 per barrel and remain above $100 through 2027 [1][2]. Group 1: Company Actions - The airline is scrapping flights on less-profitable routes due to a doubling of jet fuel prices since February [1][3]. - United Airlines has cut midweek, Saturday, and overnight services, amounting to about 5% of the company's total capacity [5]. - The company does not plan to furlough staff, defer aircraft orders, or delay investments, focusing instead on managing its schedule to reduce fuel spending [3][2]. Group 2: Financial Implications - If oil prices rise as projected, United's annual fuel bill could increase by approximately $11 billion, more than double the company's best-ever profit [2]. - The airline's strategy includes raising fares and trimming capacity to manage costs, as American carriers are more exposed to jet fuel cost increases compared to European counterparts [5]. Group 3: Market Context - The price of Brent crude has surged from $70 to $110 per barrel since late February, influenced by geopolitical tensions and disruptions in the oil supply chain [4]. - Despite the challenges, strong demand for flights has allowed major airlines, including United, to adjust their operations effectively [6].