United Airlines CEO Scott Kirby Talks Iran War's Impact on Airlines, Prices

Summary

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Bloomberg Talks – United Airlines CEO Talks Industry Challenges

Air date: June 7, 2026
Host: Lisa Abramowicz (Bloomberg)
Guest: Scott Kirby (CEO, United Airlines)

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Episode Overview

In this episode, Lisa Abramowicz sits down with Scott Kirby, CEO of United Airlines, to explore the state of the airline industry amid ongoing global challenges. They discuss resilient consumer demand, the impact of oil prices, supply chain constraints, fleet upgrades, industry consolidation, and strategic expansion plans. The conversation offers honest insights into both United's adaptability and the broader landscape facing airlines in 2026.

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Key Discussion Points & Insights

1. Resilient Demand Despite Global Uncertainties

• Strong demand in U.S. and abroad:

  • The U.S. domestic market remains robust, and international travel demand is also strong, with minor concerns in specific regions (Asia, Africa, Middle East).
  • “Really strong in the US and mostly strong around the globe.” (Scott Kirby, 00:54)

• Lingering concerns:

  • Some localized worries exist, especially if conflict or high oil prices persist, but so far, broad demand weakness hasn’t materialized.
  • “If this goes till July, it’s going to be a problem in March... and it keeps getting pushed down the road. Unfortunately, because demand stays strong.” (Scott Kirby, 01:27)

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2. Pricing, Capacity, and Consumer Behavior

• Price increases and capacity cuts:

  • United has increased fares by about 20% and trimmed capacity by 5%.
  • Kirby feels confident with these steps for now but remains watchful for changes in economic or oil price conditions.
  • “We laid out a path to getting to 100% fuel recovery... Even with fares up, they’re still in real terms lower than they were in 2019.” (Scott Kirby, 02:19)

• Diverse resilience among travelers:

  • While premium demand is strong, United sees strength across all cabins, catering to high-end travelers even within economy class.
  • “Even the economy passengers are, you know, skewing towards the top end of that K curve for air travel.” (Scott Kirby, 03:03)

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3. Fleet Upgrades and Supply Chain Challenges

• Proactive fleet management:

  • United anticipated post-COVID supply chain issues and “over-ordered” new aircraft to maintain an edge.
  • Targeting full fleet upgrades with seatback entertainment, improved seating, and Starlink Wi-Fi by next year.
  • “We got ahead of the supply chain... Most of the things we’re doing, because we're at the front of the queue, we're much less impacted than other competitors.” (Scott Kirby, 04:04)

• Engine shortages as primary bottleneck:

  • Global shortages in jet engines (specifically parts like forgings and castings) could last a decade, grounding nearly 900 aircraft worldwide.
  • “They’re going to be producing gliders because just not enough engines.” (Scott Kirby, 05:02)

• Manufacturer-specific issues:

  • Mixed views on suppliers:
    • Rolls Royce singled out as problematic in honoring contracts and contributing to Airbus delivery delays.
    • Pratt & Whitney respected for their efforts to address issues, GE praised as “doing the best.”
  • “It's not an easy problem to fix and it's going to take time.” (Scott Kirby, 05:02)

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4. Customer Experience and Industry Pressures

• Creating positive pressure:

  • United positions itself as a leader in customer experience, investing ahead of competitors in technology, in-flight upgrades, and reliability.
  • “We're investing more than anyone and we're doing the kinds of things really that no one has ever done.” (Scott Kirby, 06:50)
  • United’s mobile app is touted as “materially different” from any others.

• Key experience factors:

  • Success hinges on four pillars: technology, service, reliability, and product.
  • “You’ve got to have all four of those to win customers.” (Scott Kirby, 06:50)

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5. Industry Consolidation Prospects

• United likely to “sit out” consolidation:
  • Earlier openness to transformative mergers, but a lack of willing partners means United won’t pursue big consolidation moves in the near term.
  • “That would have required a willing partner and we don’t have one. So I think it means that United is likely sitting out the consolidation game.” (Scott Kirby, 07:52)

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6. Economic & Market Dynamics

• Leisure & external events:

  • Strong job reports (especially leisure sector) reflect organic travel demand; global events like the World Cup are a “tiny, tiny piece.”
  • “It really is the fundamentals of demand... demand is strong. People are still investing in experiences.” (Scott Kirby, 08:33)

• Oil price outlook:

  • Kirby is among few airline CEOs expecting oil to stay elevated ($90–110/barrel) for the “indefinite future.”
  • “I continue to think that at some point I’ll be wrong... But it’s just hard for me to see any kind of outcome that the straits get reliably and sustainably open.” (Scott Kirby, 09:09)

• Profitability under pressure:

  • Major airlines (United, Delta, Southwest) will remain profitable, but many competitors will struggle if high oil persists. This may trigger route cuts and “hard decisions.”
  • “If you’re losing money overall, there’s a big chunk that’s losing a lot of money. My guess is the longer this plays out, the more and more it sort of pushes executives to make hard decisions that they would rather not make, to just stop flying places and lose money going forward.” (Scott Kirby, 10:06)

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7. International Growth Strategy

• Expansion outlook:
  • United’s international growth has been strong, thanks in part to strategic hubs (Newark, San Francisco, Dulles).
  • Anticipating even more international openings as aircraft deliveries catch up.
  • “International has just been gangbusters for us... Our team is opening up cities and I’m pretty informed, like I didn’t actually know that city name.” (Scott Kirby, 10:49)

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Notable Quotes & Memorable Moments

• “Air travel by far the best value as part of the travel chain and been pleasantly surprised at the resilience of the consumer so far.” — Scott Kirby, 02:19
• “It’s crazy to me. Our team is opening up cities and I’m pretty informed, like I didn’t actually know that city name.” — Scott Kirby, 10:49
• “They’re going to be producing gliders because just not enough engines.” — Scott Kirby, 05:02
• “I don’t know who has the second best app in the world, but they’re way behind United.” — Scott Kirby, 06:50

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Key Timestamps

• 00:33 – Opening and demand overview
• 01:22 – Regional demand and early impacts of high prices
• 02:10/02:19 – Fare increases and consumer resilience
• 03:03 – Premium vs. overall travel demand
• 04:04 – Upgrades and supply chain strategy
• 05:02 – Engine shortages as decade-long constraint
• 06:50 – Competitive pressure and customer experience innovation
• 07:44 – Discussion of industry consolidation
• 08:33 – Travel demand drivers (summer, World Cup, jobs)
• 09:09 – Oil price commentary
• 10:06 – Outlook on airline profitability and route adjustments
• 10:49 – United’s international expansion

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This candid conversation with Scott Kirby provides a rich, behind-the-scenes look at how United Airlines is handling unprecedented industry pressures, and why innovation, resilience, and forward-looking strategy are essential in the unpredictable world of global aviation.

Transcript

[A]

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[B]

Bloomberg Audio Studios Podcasts radio news to Rio de Janeiro.

[C]

Now that's where our colleague Lisa Abramowicz is of course the co host of Bloomberg Surveillance. She's sitting down with the CEO of of United Airlines, Scott Kirby. Lisa, take it away.

[B]

Thank you so much, David. I am here still in Rio with Scott Kirby, the CEO of United Airlines. Scott, always wonderful to speak with you. Great to be here, Lisa, thanks for being here. I was actually surprised by the tone here and I shouldn't be surprised because every conversation I have with different executives in the airline industry, things are better than expected. Demand is actually picking up. It's been more resilient. This summer is going to be a record summer. You're hearing the same thing. Is that kind of your tone as well?

[C]

A lot of questions for people around the globe, really, like, because we're a US Airline, obviously, like, what do you think is going to happen in the Gulf? And people are worried about oil prices, but demand, you know, certainly us, anything related to us feel strong. I think there are other parts of the globe that, you know, maybe are a little more concerned about demand but really strong in the US and mostly strong around the globe. And people have the view that, you know, they hope that this gets resolved at some point and that we're back on track to what was looking to be a really good year to start the year.

[B]

Where are you seeing demand kind of fizzle around the world or at least fade just a touch in response to higher prices?

[C]

You know, we don't really see it at United because So, you know, 80% of our traffic, even international, international traffic is US point of sale. But you can, I think, see, you know, starting to see the glimmers. You know, Asia is the first place, you know, the impact of oil and refinery issues in Asia have been the worst. And you know, and I think Africa, you know, certainly the Middle east has had an impact. So you can, I think, sense some worry. Not really evidence of weakening of demand. But, you know, you talk to people in one on ones, you get sent some concern that if this goes, you know, sort of been the standard line all along. If this goes till July, it's going to be a problem in March. If this goes into April, it's going to be a problem and it keeps getting pushed down the road. Unfortunately, because demand stays strong.

[B]

Well, and so so far you've raised prices about 20%, cut capacity about 5%. Is that enough? Do you anticipate more price increases and more capacity limitations?

[C]

You know, time will tell. Depends on what's happening with the economy, what happens with oil prices. But I feel pretty good about where we are right now. You know, we laid out a path to getting to 100% fuel recovery. It certainly looks like we're still pretty much solidly on that path and you know, even though oil has come down a little. So I actually would move it a little earlier from when we set it, but we feel pretty good about where the demand environment is. And you know, the consumer's been resilient even with fares, you know, up. But in truth, like fares are up 20%, but they're still in real terms lower than they were in 2019. So air travel by far the best value as part of the travel chain and been pleasantly surprised at the resilience of the consumer so far.

[B]

Is it all driven by the premium consumer who seems to be insatiable or is it really across the board?

[C]

You know, always talk about, at least at United we're investing nose to tail for our customers and most of the things that we're doing for the product apply to everyone. Seatback entertainment, every seat Starlink on every aircraft, you know, great new interiors applies to everyone. And you know, the premium is a, has been stronger for a couple of years. It's still a little bit stronger, but it's pretty hard. You know, I think it's been strong, you know, across the board for us, but you know, we skew to the high end. You know, even the economy passengers are, you know, skewing towards the top end of that K curve for, for air travel and International, of course, skews even higher. But we really haven't, haven't seen any, any noticeable cracks in demand sort of anywhere in the cabin.

[B]

And you've been upgrading all your planes quite considerably, nose to tail. Whether it's the fold down seats to have you sleep across.

[C]

My favorite.

[B]

Exactly. You've got kids. I wish I'd had that one. Anyway, moving forward, moving along, do you find that it's difficult to upgrade as quickly as you want because of just some of the delays in deliveries that we're seeing in certain of the aircraft manufacturers?

[C]

You know, we, we got ahead of it. We started ahead, you know, we ordered a lot of aircraft. We got ahead of the supply chain, you know, as being the first really back during COVID it, we Anticipated problems. So we actually over ordered because we anticipated problems. The problems have been bigger than we thought, but we've mostly managed through those. And you know, like seat manufacturing, seats are a big issue across the industry. We've mostly stayed ahead. We've been somewhat impacted by it, but we've mostly stayed ahead of that. And you know, even Starlink for example, you know, we're going to have the whole fleet done. We expect next year. It can't be done fast enough. But by being the first big airline to order, like we're at the front of the queue. And so most of the things we're doing because we're at the front of the queue, we're much less impacted than other competitors around the globe.

[B]

There were reports that you were talking about Rolls Royce a couple of minutes ago, talking about how they've been a problem in terms of just honoring contracts. And what exactly is the role in some of the delays that we're seeing, particularly with Airbus?

[C]

Well, you know, engine engines are really the issue. I think they're going to constrain supply around the glob for probably the next decade. There's not enough engine capacity. There's something like 900 aircraft around the globe that are grounded right now that should be flying because they don't have engines that can fly. And it's a really, it's not an easy problem to fix and it's going to take time. And so really kind of we need all the engine manufacturers and really the forgings and castings that go into the blades, the engines are really, I think the biggest constraint. And you know, that takes time to fix. But we start fixing that, you know, all the aircraft that Boeing and Airbus, they're going to be able to produce a lot of aircraft. I think they're both starting to get things on track for producing aircraft, but they're going to be producing gliders because just not enough engines.

[B]

Gliders are not going to fly for the industry, quite literally. I cannot imagine that trying to have long haul flight on a glider. Do you think though that Rolls Royce has been a bad actor or not as much of a good actor relative to say some of the others that have been ramping up?

[C]

Well, that's certainly been our personal experience with United at Rolls and that's what I hear from around the industry too,

[B]

is that constrained Airbus deliveries more than Boeing.

[C]

You know, they each had constraints, you know, Rolls, you know, has been constrained. Pratt and Whitney, you know, has had a lot of well publicized challenges. By the way, I respect Pratt Whitney. Is working really, really hard to fix it. And that's all you can ask, really. GE's doing, you know, the best of the engine manufacturers, but all of them have had challenges going forward.

[B]

It seems like all of the airlines are trying to upgrade as quickly as they can because it is going to be about the experience that you're delivering to the customer that's going to determine success much. Have you seen the pressures kind of come into play, the sort of pressures in the industry that you had been expecting as a result of some of the higher prices?

[C]

Well, I think we're the ones creating pressure, to be honest with you. We're investing more than anyone and we're doing the kinds of things really that no one has ever done. You know, whether, you know, it's the relaxed row here in the United States putting Starlink on every airplane, but also the technology you use, the United app, it is materially different than, I don't know who has the second best app in the world, but they're way behind United. And we're just doing more and more that. And it just changes how it feels to fly. And it's remarkable. That's how you win brand loyal customers. When you change the whole experience, it's not just about the route, network, it's about the technology, the service, the reliability and the product. And you got to focus on all four of those. You got to have all four of those things to win customers. And it's been working really well. At United. We're just continue to push to find ways to invest more and more and more in new creative ideas to make people think, hey, it's cool to fly United.

[B]

Are you still thinking about consolidation in any form?

[C]

Well, everyone's asking me about it. You're still thinking about it, trying to take it off the table?

[B]

Yeah, yeah, we're putting it back on. So here it is. It's still on the table for you.

[C]

You know, I, you know, I said it at a conference last week, you know, I kind of came for the last couple of years at least, thought that a big kind of transformative deal to take to create a great US airline that could beat around the globe was really where the opportunity was. And, but I've always known that that would have required a willing partner and we don't have one. So I think it means that United is likely sitting out the consolidation game.

[B]

Meanwhile, going forward, we got the best jobs report in a long time on Friday, and a lot of it was driven by leisure hiring. We heard that across the board. How much of this is coming from just the organic demand heading into summer. And how much of this is really being driven by World cup traveling?

[C]

You know, World cup is a tiny, tiny piece of really is the fundamentals of demand. And you see it everywhere. That demand is strong. People are still investing in experiences. You know, I've told you before, like to me, the economy, we're a really good real time barometer. The economy, the economy feels strong. The jobs report is consistent. Like I wasn't that surprised by the jobs report because it looks to me like the economy is doing pretty well.

[B]

Do you think that oil prices will stay at this level and continue to be a challenge at a time when every airline executive here expect it to go down? Almost except for you. But everyone expects the prices to go down.

[C]

I've thought so really since mid March, that oil is going to be higher for longer. I continue to think that at some point I'll be wrong. It'll get, it'll go down. But it's just hard for me to see any kind of outcome that the straits get reliably and sustainably open. They may open for a little bit, you know, but just the dynamics make it hard for me to think that that's going to happen. So I think this kind of 90 to $110 a barrel, you know, what do I know? I'm an airline CEO. But we're planning for that sort of for the indefinite future. That 90,$110 level.

[B]

Coming into this conflict, the baseline assumption was that if prices got to that level, didn't stay at that level, there'd be bankruptcies, you'd have a lot of difficulties in the airline industry and certainly there have been pressures. Yeah, but the resilience of the consumer and the ability to absorb pricing has surprised everybody.

[C]

Yeah.

[B]

Do you think that that will be the likely response to a persistently high oil price? Not necessarily people going out of business, but airline ticket prices going up and staying up?

[C]

Yeah, I think airline prices, the consumer has been even more resilient. I thought the consumer would be resilient. It's been more resilient than I thought the consumer would be. So I think that will happen. But I also think, you know, you still look around like United and Delta and Southwest, by the way, are all three going to be solidly profitable this year? My guess is at oil, 90 to 110, like everyone else, is losing money. Some, a lot of money. That means there's a big chunk of those route networks. You know, if you're losing money overall, there's a big chunk that's losing a lot of money. My guess is the longer this plays out, the more and more it sort of pushes executives to make hard decisions that they would rather not make, to just stop flying places and lose money going forward.

[B]

Is there any place that you want to be expanding and just to sort of wrap it up in our lovely beach here that we're sitting at in Rio?

[C]

You know, we look forward to expanding really around the globe. A lot of our growth has been international. It slowed down this year partly because, you know, Boeing's been behind on Wide Valley. Deliveries are starting to catch up. But we're looking for, you know, international has been great for us. United was born on third base for International with hubs in Newark, which is the best, you know, Pacific Gateway. San Francisco best, you know, Pacific Gateway, Newark. Atlantic Dulles is probably the second best Atlantic Gateway. So international has just been gangbusters for us and we're opening up, you know, it's crazy to me. Our team is opening up cities and I'm pretty informed, like I didn't actually know that city name.

[B]

Scott Kirby, always wonderful to speak with you, the CEO of United.

[A]

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