Airlines Cut Scheduled Flights as Oil Prices Soar

Source: Xinhua News Agency

Beijing, March 21 — Due to the impact of the Middle East situation, international oil prices remain high. To cope with rising aviation fuel costs, several airlines, including United Airlines and Air New Zealand, have announced reductions in their scheduled flights.

On March 20, United Airlines CEO Scott Kirby said the company will cut 5% of its regular flights in the second and third quarters to address the surge in aviation fuel costs caused by high oil prices.

On November 7, 2025, a United Airlines aircraft prepares to land at Ronald Reagan Washington National Airport in Arlington, Virginia. Photo by Hu Yousong, Xinhua News Agency

In a memo to employees, he stated that United Airlines is preparing for oil prices reaching as high as $175 per barrel and remaining above $100 per barrel through the end of 2027. If this occurs, United’s annual fuel expenditure would increase by $11 billion, more than double its profits in the best year.

According to Reuters on the 20th, since the end of February, aviation fuel prices have nearly doubled, driving up costs across the industry. Additionally, route adjustments and airspace restrictions have disrupted the global aviation flight patterns.

Kirby recently said that if fuel costs remain high, airlines would prefer to abandon some demand rather than operate unprofitable routes.

The Chicago-based airline has already reduced some less-frequent flights. In the memo, Kirby mentioned that United will cancel about 3% of off-peak flights in the second and third quarters, including red-eye flights and midweek flights with lower passenger loads. The airline will also cut about 1% of its capacity at Chicago O’Hare International Airport and continue suspending flights to Tel Aviv and Dubai, bringing this year’s capacity reduction to about 5% of the planned operations.

Air New Zealand announced on the 12th of this month that it will cut approximately 1,100 flights, about 5% of its domestic and international scheduled flights, before early May, affecting around 44,000 passengers.

This is a photo of an Air New Zealand aircraft at Wellington Airport (taken October 30, 2018). Photo by Guo Lei, Xinhua News Agency

Air New Zealand CEO Niki Ravidshankar told a New Zealand news program that “the affordability of air travel has indeed become a challenge,” and the flight cuts will mainly target off-peak flights.

Scandinavian Airlines (SAS) was also among the first to reduce scheduled flights due to rising fuel prices, announcing a reduction of 1,000 flights in April on the 17th. The airline stated in an email, “The entire European aviation industry is currently feeling the pressure caused by the sudden fuel shock.”

Vietnam’s authorities have warned the country’s aviation industry to prepare for possible flight reductions starting in April due to increased risks of fuel shortages.

Delta Air Lines said that if fuel prices remain high, it has the capacity to “adjust capacity flexibly.”

Fuel costs are one of the main expenses for airlines. Delta CEO Ed Bastian said that in March alone, rising aviation fuel prices increased the airline’s operating costs by $400 million.

Photo of Dubai International Airport’s terminal interior taken on March 7. Photo by Xinhua News Agency

American Airlines estimates that due to rising fuel prices, its first-quarter expenses will increase by $400 million.

To address rising aviation fuel costs, airlines such as Qantas, Scandinavian Airlines, Air New Zealand, Air France-KLM, and Air India have raised ticket prices or fuel surcharges. Some airlines, using hedging strategies to lock in fuel prices, have not yet faced severe cost increases, but if conflicts persist, they will inevitably encounter difficulties.

According to Reuters, over the past 20 years, U.S. airlines have largely ceased fuel hedging operations; last year, Scandinavian Airlines stated it had no hedges for its fuel consumption over the next 12 months.

John Gladdick, an aviation management lecturer at McGill University in Canada, said, “When you see oil prices surge by 30%… it immediately affects the profitability of every flight operated by airlines,” adding that ticket price increases will impact travel demand. Airlines will first cut or merge flights, then reduce services like beverages and meals, and eventually start canceling flights. “If this situation continues for a few more weeks, we’re not far from that point.” (Qiao Ying)