United Airlines Is Increasing Fares Thanks to Climbing Jet Fuel Prices

An increase in fuel prices definitely means you pay more at the pump, but that's not the only way that increased energy prices change your bottom line. United Airlines has announced a number of changes to its plans for the next few months in response to a rise in jet fuel prices, including increases to its fares.

Following the news of these fare increases and the other changes, many want to better understand how much prices might be going up. Here's what we know.

Jet Fuel prices have nearly doubled since the war with Iran began in late February, and that has led United to make a number of changes, including cutting 5 percent of its flights for the spring and summer. In a memo to employees on March 20, United CEO Scott Kirby explained that because fuel costs have increased so dramatically, United could face $11 billion in additional costs if no action is taken.

“The reality is, jet fuel prices have more than doubled in the last three weeks. If prices stayed at this level, it would mean an extra $11B in annual expense just for jet fuel. For perspective, in United’s best year ever, we made less than $5B,” he explained.

In addition to the cuts in flights, United has raised the cost of its first checked bag from $35 to $45 on domestic flights within the United States, Mexico, Canada, and Latin America.

Card perks and other rewards programs still allow you to check a bag for free. This is the first time United has increased the cost of checking a bag in more than two years. Additionally, United is introducing a new three-tier fare structure for its Polaris business-class and Premium Plus premium-economy cabins. These new tiers are called Base, Standard, and Flexible, and apply to long-haul international flights, transcontinental U.S. routes, and select Hawaii services.

Essentially, this new structure will likely give you fewer perks at a higher cost. The Base offers you a lay-flat seat in the Polaris section but removes advance seat selection, reduces you from two checked bags to one, and restricts your lounge access to the United Club rather than the higher-end Polaris lounge. You also can't make changes to or get a refund for your seat with the Base package, a radical departure for Business class.

The Standard tier adds back seat selection, extra checked bags, and the ability to make changes to your itinerary, while the Flexible tier includes full refundability and the most generous change policies.

The news of these changes comes as airfares have already risen by as much as 15 percent since the start of the conflict with Iran, per Kayak. Because the future of the war is uncertain, we don't know how much higher prices might climb before the conflict resolves. For now, though, businesses like United are taking actions that seem designed to preserve their bottom line amid a climate of rising costs.