Airlines Are Already Preparing for an Oil Crisis | WIREDSkip to main contentMenuSECURITYPOLITICSTHE BIG STORYBUSINESSSCIENCECULTUREREVIEWSMenuAccountAccountNewslettersApple MacBook NeoM5 MacBook Air ReviewBest REI Outdoor DealsBest Mountain E-BikesBest Paper PlannersDeals DeliveredSecurityPoliticsThe Big StoryBusinessScienceCultureReviewsChevronMoreExpandThe Big InterviewMagazineEventsWIRED InsiderWIRED ConsultingNewslettersPodcastsVideoLivestreamsMerchSearchSearchAarian MarshallGearMar 22, 2026 5:37 PMAirlines Are Already Preparing for an Oil CrisisWith the Iran war doubling oil prices, experts say the airline industry’s belt-tightening is an economic canary in the coal mine for the rest of the world.United Airlines' CEO published a letter on Friday outlining his company's plan to weather the coming period of economic turmoil as jet fuel prices continue to climb.Justin Sullivan/Getty ImagesCommentLoaderSave StorySave this storyCommentLoaderSave StorySave this storyThe war with Iran and ensuing blockade in the Strait of Hormuz, a critical shipping lane, has spiked oil prices and sent governments scrabbling for their reserves. How high will prices go, and how bad could it get?On Friday night, United Airlines CEO Scott Kirby published a memo to his employees that demonstrates his very fuel-dependent business is prepping for a very long fallout. “Our plans assume oil goes to $175/barrel and doesn’t get back down to $100/barrel until the end of 2027,” he wrote.Jet fuel accounts for between a quarter and a third of airlines’ operating costs. Prices have doubled from $70 a barrel since the war started four weeks ago, threatening to seriously cut into airlines’ profitability. Kirby said that his airline has a strategy: United will cut some 5 percent of its planned flight schedule during the second and third quarters of this year, with trims coming especially in “off peak periods” like redeyes and less popular travel days: Tuesdays, Wednesdays, and Saturdays.“Honestly, I think there's a good chance it won't be that bad,” Kirby wrote in the memo, “but … there isn't much downside for us to prepare for that outcome.”United’s moves are significant for not only the travel industry but the wider global economy, analysts say. If it all plays out the way Kirby predicts, “this would be incredibly unwelcome news to everyone who is not in the oil refining business,” says Jason Miller, a professor at supply chain management at Michigan State University’s Eli Broad College of Business.Airlines might be a particularly notable canary in the economic coal mine because their business leans even more heavily on oil prices, and especially refined oil prices, than most. Air transportation ranks just below asphalt paving as the US industry that spends the greatest share of its non-labor costs on refined petroleum products, Miller has calculated. Kirby’s predictions, while dire, are in line with what others in the commodity market are predicting, Miller says.“Economically, this energy shock is hitting at the worst time possible," Miller says. Add its effects to a slow job market and a global economy troubled by the US’ back-and-forth tariff regime, and economists start to think about recession. The Iran War and the ensuing energy crisis "has played out longer than many have expected it to play out,” Miller says. Kirby’s memo is an acknowledgement that “Hormuz may not be open for business very quickly.”The effects of the fuel price spikes are already affecting the travel industry. Last week, American Airlines CEO Robert Isom said the company had spent an additional $400 million on fuel. Airlines have reported strong demand in the past weeks, with United’s Kirby noting in his memo that the past 10 weeks had seen the airline take in the most revenue on bookings ever. But it remains to be seen whether lots of people are actually enthusiastic about travel, or flyers spooked about geopolitics and fears of high ticket prices moved early to lock in their plans before oil costs got higher. Isom noted that, if oil prices remain high, “we're certainly going to be nimble in terms of capacity, to make sure that supply and demand stay in balance."How bad it could get for airlines—and its passengers—depends not just on how long oil prices stay elevated, but how long the businesses’ questions about the crisis remain unanswered.“If we stay in this uncertainty for a long time, this is adding to the complexity,” says Ahmed Abdelghany, who studies airline operations as a professor in Embry-Riddle Aeronautical University’s College of Business. “The longer it goes, the more problematic to the airlines that remain.”CommentsBack to topTriangleYou Might Also LikeIn your inbox: Upgrade your life with WIRED-tested gearNvidia plans to launch an open-source AI agent platformBig Story: He built the Epstein database—it consumed his lifeShould you leave your phone charging overnight?Watch: How right wing influencers infiltrated the governmentAarian Marshall is a staff writer covering transportation systems and cities. Before joining WIRED, she wrote for The Atlantic’s CityLab. Marshall is based in San Diego and is developing opinions about tacos. ... Read MoreStaff WriterXTopicsAviationAir TravelAirlinesTraveloilIranRead MoreHigher Jet Fuel Prices Could Melt Your Summer Travel PlansAirline ticket prices are already rising, but an extended crisis in Iran could have bigger effects on the global travel industry.Aarian MarshallTrump’s War on Iran Could Screw Over US FarmersThe Middle East supplies a huge amount of the world’s fertilizer. Conflict in the region has sent prices soaring ahead of the critical spring planting season.Molly TaftWhat Happens If Iran Shuts Down the Strait of Hormuz?The Strait of Hormuz is one of the most sensitive pressure points in the global economy. Conflict in Iran could put it at risk indefinitely.Carla SertinIran War Puts Global Energy Markets on the Brink of a Worst-Case Scenario“This will be so, so, so, so, so bad,” one analyst says.Molly TaftHow the Iran War Could Jack Up Prices on Store ShelvesThe Strait of Hormuz, a busy waterway off the coast of Iran, has come to a near standstill. If the war drags on much longer, it could mean higher prices for consumer goods around the world.Aarian MarshallThe War on Iran Puts Global Chip Supplies and AI Expansion at RiskFrom helium extraction in Qatar to shipping lanes in the Strait of Hormuz, the semiconductor industry depends on fragile links across the Gulf. Escalation could ripple through global chip production.Carla SertinThe Iran War Is Throwing Global Shipping Into ChaosFlexport CEO Ryan Petersen says the conflict is stranding cargo and threatening inflation.Steven LevyThe Supreme Court’s Tariff Ruling Won’t Bring Car Prices Back to EarthDespite Friday’s SCOTUS ruling, many tariffs affecting the auto industry will remain. So will the other dynamics that have led to today’s historically high car prices.Aarian MarshallGet Ready for a Year of Chaotic Weather in the USA massive Western heat wave and a potential El Niño event raise concerns about a long stretch of unpredictable and extreme weather.Molly TaftWall Street Has AI PsychosisA “thought experiment” about the impacts of AI sent stocks tumbling earlier this week. It’s probably going to keep happening.Steven LevyMissile Attacks Are Overwhelming the Gulf. 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United Airlines’ CEO, Scott Kirby, is proactively preparing his company for a potential oil crisis triggered by the ongoing conflict in Iran and the subsequent blockade of the Strait of Hormuz. This preparation stems from Kirby’s memo outlining a strategy predicated on oil prices reaching $175 per barrel, a level that he doesn’t anticipate returning to below $100 until the end of 2027. Jet fuel accounts for a significant portion – between a quarter and a third – of United’s operating costs, and the recent doubling of fuel prices from $70 to $140 per barrel presents a severe threat to profitability. As a response, United intends to reduce its flight schedule by approximately 5 percent, focusing on trimming operations during off-peak periods, specifically Tuesdays, Wednesdays, and Saturdays. Kirby’s admission that he’s “preparing for that outcome” suggests a degree of uncertainty while simultaneously demonstrating a commitment to mitigating potential damage.

Jason Miller, a supply chain management professor at Michigan State University’s Eli Broad College of Business, highlights the significance of airlines as a "canary in the economic coal mine," emphasizing that their dependence on refined petroleum products – ranking second only to asphalt paving in US industry expenditure – makes them uniquely vulnerable to energy price shocks. The timing of this potential crisis is particularly concerning, coinciding with a sluggish job market and a globally troubled economy influenced by US trade tariffs. Miller believes the situation “would be incredibly unwelcome news to everyone who is not in the oil refining business.” United’s actions, while potentially disruptive to the travel industry, represent a defensive maneuver driven by the most pessimistic predictions within the commodity market.

The immediate effects of this fuel price surge are already observable within the travel sector. American Airlines’ CEO, Robert Isom, reported an additional $400 million spent on fuel, while United’s robust booking revenue over the past 10 weeks – a record high – underscores the current demand. However, the question of whether consumers will continue to travel despite rising ticket prices and heightened geopolitical concerns remains crucial. Robert Isom’s statement regarding “nimble capacity” suggests United will adapt to maintain supply and demand balance. Ahmed Abdelghany, a professor at Embry-Riddle Aeronautical University’s College of Business, further emphasizes the complexity introduced by prolonged uncertainty, noting that “the longer it goes, the more problematic to the airlines that remain.”

Ultimately, the duration of the oil price spike and the extent to which the crisis is resolved will determine the severity of the impact on airlines and their passengers. The situation highlights the interconnectedness of global markets and the potential for localized conflicts to have far-reaching economic consequences.