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U.S. airlines have been facing a turbulent period since the Iran war began. With oil prices regularly hovering above $100/barrel (last night's temporary ceasefire has helped bring down oil prices, for now), carriers have been cutting unprofitable flights and passing higher costs to travelers. For example, United Airlines (UNH) said it will trim capacity and raise first/second checked-bag fees by $10 to offset surging fuel costs. At the same time, demand has shown resilience. Chief Commercial Officer Andrew Nocella noted that United has been able to raise fares without hurting bookings. Still, rising costs have hit margins industry-wide.
In this environment, United is also set to report its Q1 earnings on April 21, which will be closely watched. Investors will listen for clues on pricing power, cost trends, and guidance as United competes in the high-cost, post-Covid market.
