United Airlines slashes 2026 forecast as fuel costs surge

United Airlines slashed its 2026 earnings outlook Tuesday as it grapples with a surge in jet fuel prices due to the war in the Middle East.

United said it could earn between $7 and $11 a share on an adjusted basis this year, down from its previous forecast of between $12 and $14 a share that it released in January, more than a month before the U.S. and Israel attacked Iran.

The carrier, like others, is trimming some of its planned flying this year to reduce costs. Wall Street had already been adjusting its expectations for the year as a result. Analysts polled by LSEG had forecast that United's adjusted, full-year earnings would be $9.58 a share.

For the second quarter, United forecast adjusted earnings of between $1 and $2 a share. Analysts had expected $2.08 a share for the quarter. United estimated its fuel price would average $4.30 a gallon in the second quarter.

The carrier said it expects its revenue to cover between 40% to 50% of the fuel price increase in the second quarter, as much as 80% in the third and between 85% and 100% by the end of the year.

United reiterated that it is tweaking its schedules to adjust to higher fuel, with capacity in the second half of the year expected to be flat to up about 2% on the year. It grew 3.4% in the first quarter.

Here is what United Airlines reported for the quarter that ended March 31 compared with what Wall Street was expecting, based on estimates compiled by LSEG:

• Earnings per share: $1.19 adjusted vs. $1.07 expected
• Revenue: $14.61 billion vs. $14.37 billion expected

Revenue overall rose more than 10%, to $14.61 billion, up from the $13.21 billion from a year before.

For the first quarter, United's net income rose 80% to $699 million, or $2.14 cents a share, compared with net income of $387 million, or $1.16 cents a share, a year earlier. Adjusted for one-time items, United posted earnings per share of $1.19 a share.

Unit revenue was up in every reported segment, including for domestic U.S. flights, where it rose 7.9% to $7.9 billion from a year earlier, signaling strong pricing power in the quarter.

"These are results our employees can be proud of, and they show the resilience of our long-term strategy, even in the face of escalating fuel expense," CEO Scott Kirby said in an earnings release.

Jet fuel in the U.S. was going for $3.51 a gallon on Monday, down from the high on April 2 of $4.78, but far above the $2.39 on Feb. 27, the day before the first attacks on Iran, according to prices assessed by Platts.

Airline executives have said demand has remained robust even while they have increased fares and checked bag fees as they pass along higher fuel prices to customers. The industry has become more reliant on travelers who are willing to shell out more for flights and bigger seats, and who are less affected by price increases.

Alaska Airlines pulled its 2026 forecast on Monday because of higher fuel prices. It has raised fares about $25, CEO Ben Minicucci told analysts Tuesday.

United CEO Scott Kirby is likely to face questions on the company's 10:30 a.m. ET earnings call on Wednesday about his ambitions for a merger with another airline.

Kirby floated a potential merger with American Airlines to a Trump administration official earlier this year, according to a person familiar with the matter, but President Donald Trump said he was against the idea.

"I don't like having them merge," he told CNBC's "Squawk Box" on Tuesday morning. He said he would like someone to buy struggling discount carrier Spirit but he also suggested that the federal government could "help that one out."

American also rejected the idea of a merger with United last week.