UNITED AIRLINES REDUCING FLIGHTS DUE TO HIGH FUEL PRICES

NEW YORK, March 21 (Bernama-dpa) -- US carrier United Airlines on Friday announced it would cut its scheduled flights following the drastic rise in fuel prices due to the Iran war, reported German news agency dpa. 

In total, the carrier said it was reducing capacity by 5 per cent in the short term. "Our current plan is to restore the full schedule this fall," United chief executive officer Scott Kirby said in a message to employees.

United is currently preparing for the oil price to rise to US$175 per barrel and for it not to fall below US$100 per barrel until the end of 2027, Kirby said, adding that it was possible things would not not get that bad.

The price of jet fuel has more than doubled in over the last three weeks, the United boss pointed out. At the current level, this would mean additional fuel costs of US$11 billion a year for the airline. 

At the same time, Kirby assured employees that the airline had a solid financial cushion and did not want to cut back on investments in the future.

Connections to Tel Aviv and Dubai, which represent around 1 per cent of flights, have already been suspended amid the escalation in West Asia.

Additionally, currently unprofitable routes, which account for around 3 per cent of capacity, will not be operated in the next two quarters. A further 1 per cent of flights will be cut at United's Chicago hub.

Oil prices have been surging due to a de facto blockade of the Strait of Hormuz amid the conflict in West Asia.

The Strait, a major shipping route and the only path from The Gulf to the open sea, has been effectively blocked by Iran in retaliation for US and Israeli airstrikes. 

--BERNAMA-dpa