A United Airlines will cut routes, due to the rise in oil prices. The CEO of the air carrier fears that the price of a barrel will reach US$ 175 and predicts long-term consequences. In order to avoid flying unprofitable flights, United Airlines has plans to cancel flights that would be carried out in the next two quarters.
Now, in a communication to the company’s workers cited by Reuters, Scott Kirby, CEO da United Airlinespredicts that the price of a barrel will continue above 100 dollars by the end of 2027 and which will reach the 175 dollars at some point. If so, maintaining all flights would mean seeing fuel costs soar to around 11 billion dollars, more than double the profit recorded in the “best year ever”, he pointed out.
The company wants to protect a period that is expected to be marked by high prices of a barrel of crude oil, if the war in the Middle East does not end in the short term. Remember that the barrel of Brent oil (European benchmark for crude oil futures contracts) are 53% above what was observed at the beginning of the warthat is, in just three weeks. On Friday, negotiations ended in 112.19 dollars, after approaching 120 dollars the day before (maximum value of the last four years).
At issue are the supply-level disruptionsas a result of the destruction of energy infrastructure in that region and the blockade of the Strait of Hormuz by Iran, which threatens to target any vessel that is not owned by its allies.
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