United Airlines (NASDAQ:UAL) said rising fuel prices are expected to increase its operating costs by nearly $6 billion this year compared with projections made at the start of 2026, as the recent surge in oil prices weighs on its earnings outlook.
Despite the higher fuel bill, the airline lifted the lower end of its full-year adjusted earnings guidance, citing resilient travel demand, stronger ticket prices and disciplined capacity management.
Profit outlook updated as fuel costs climb
United now expects adjusted earnings of between $9 and $11 per share for 2026, compared with its previous forecast of $7 to $11 per share issued in April.
The midpoint of the updated guidance remains slightly below the LSEG analyst consensus of $10.46 per share.
For the third quarter, the carrier forecast adjusted earnings of $2.50 to $3.50 per share based on an average jet fuel price of $3.69 per gallon.
Management said the increase in fuel prices since the beginning of July alone has added approximately $575 million to expected third-quarter costs, reducing adjusted earnings by an estimated $1.12 per share.
United added that if fuel prices return to early July levels, earnings could exceed the upper end of both its quarterly and full-year guidance ranges.
Airline changes guidance approach
Given the recent volatility in energy markets, United said future earnings guidance will be based on prevailing fuel prices at the time forecasts are issued.
The company’s third-quarter outlook uses the Gulf Coast jet fuel forward curve as of July 14.
United also reported adjusted earnings of $1.99 per share for the second quarter, beating analyst expectations of $1.88, while revenue increased 16% year over year to $17.7 billion.
Higher fares help offset rising fuel prices
The airline said fuel expense during the second quarter increased by $2.3 billion, or 84%, compared with the same period last year.
United recovered about half of those higher fuel costs through pricing during the quarter and expects to recover between 80% and 90% of the current increase during the third quarter before fully offsetting the impact by the fourth quarter.
The company also expects revenue per available seat mile to grow at a faster pace in both the third and fourth quarters than the 12.1% increase recorded in the second quarter, reflecting continued pricing strength.
Travel demand remains resilient
United said oil prices have climbed roughly 15% since early July following renewed conflict involving the United States and Iran, increasing uncertainty for airlines across the industry.
The carrier plans to reduce fourth-quarter capacity below currently published schedules and said it is prepared to make additional adjustments if fuel prices remain elevated.
Demand across its network remained robust during the second quarter, with premium revenue rising 16%, basic economy and loyalty revenue each increasing 11%, cargo revenue climbing 23% and contracted business revenue advancing 27%.
United also secured $3.7 billion in additional liquidity through private financing transactions, describing the move as protection against geopolitical uncertainty and the risk of a further spike in oil prices.
The airline is scheduled to discuss its quarterly results during a conference call with analysts and investors on Thursday.
United Airlines stock price
