United Airlines on Wednesday said it expects to spend an additional $6 billion on jet fuel, the second-highest cost for airlines after labor, this year, based on Tuesday’s crude oil prices.
The airline said in its second-quarter earnings release that it had already spent an extra $2.3 billion on fuel in the second quarter, or 84% more compared to the same period a year earlier. Higher air fares for customers have helped airlines, including United, offset some of the uptick in fuel prices, as consumer demand for air travel remains robust.
Delta Air Lines last week also said as it reported its second-quarter earnings that demand remains strong even as the carrier raised fares to offset higher fuel costs. As such, it doesn’t expect to cut ticket prices anytime soon.
“Airfares are a function of supply and demand. The demand set is really strong and the supply is in balance,” Delta CEO Ed Bastian told CNBC. In the same interview, Bastian noted that Delta customers tend to be on the upper end of the K-shaped economy.
Like United, Delta’s own jet fuel costs spiked, too. The airline spent $4.4 billion on fuel in the second quarter, up 77% from the same period one year earlier.
The price of jet fuel hit a record high of nearly $5 in April amid an ongoing war between the U.S. and Iran, according to the Argus U.S. Jet Fuel Index. On Tuesday, the price stood at $3.64 a gallon, according to the index.
Other major U.S. carriers will report earnings later this month.
In addition to raising airfares, airlines have responded to high fuel costs by temporarily cutting inefficient routes, tacking on jet fuel surcharges to ticket prices, or in some cases, raising checked bag fees.