By Doyinsola Oladipo
NEWARK, New Jersey, Aug 25 (Reuters) - United Airlines CEO Scott Kirby said on Tuesday he expects airfares to rise gradually in the first half of 2027, though by less than this year, as travel demand remains strong.
"I think you're going to still see gradual increases in fares. Not as big a jump as happened this year," Kirby told reporters.
The comments underscore continued strength in the travel market despite higher fares and broader economic uncertainty. Kirby said United has
yet to see a slowdown in demand and expects that strength to help it recover higher fuel costs in the fourth quarter of 2026.
U.S. airline fares were up 25.5% in July from a year earlier, according to the Labor Department, and were nearly 25% higher on average from April through July.
Kirby, however, said airfares remain about 13% below pre-pandemic levels after adjusting for inflation and are moving back toward what he described as more normal levels.
"We're going to return to sort of a normalized fare level where airlines can be profitable enough to reinvest," he said.
Asked about demand amid geopolitical uncertainty and extreme heat in Europe, Kirby said the airline had seen no meaningful weakening.
"There really hasn't even been a blip in demand," he said. "Demand is very, very strong across the board."
STRONG DEMAND HELPS OFFSET FUEL PRESSURE
Kirby also linked that demand strength to United's ability to recover higher fuel costs.
Asked whether United could still fully recover higher fuel costs with jet fuel near $4 a gallon, Kirby pointed to strong demand but stopped short of a firm forecast.
"We'll see," he said. "But given the strength in demand, I think we'll still recover 100% in fourth quarter."
Kirby also said aircraft deliveries were "back largely on pace" after supply-chain problems proved worse than United had anticipated when it placed large aircraft orders several years ago.
(Reporting by Doyinsola Oladipo; Writing by Rajesh Kumar Singh; Editing by Nick Zieminski)
