Environment

Jet fuel prices are rising to levels not seen since before the Covid pandemic and it’s set to drive up airfares, United Airlines CEO Scott Kirby said Wednesday.

“Higher jet-fuel prices lead to higher ticket prices,” Kirby told CNBC’s “Squawk on the Street.” “Ultimately, we’ll pass that through.”

United forecast average fuel costs of $2.39 a gallon in the fourth quarter, when it expects a surge in bookings from the end-of-year holidays and recently loosened international travel restrictions. That’s up from $2.14 a gallon in the third quarter and the $2.02 on average it paid in the fourth quarter of 2019.

Kirby said higher demand usually drives fuel prices up. The increase in demand is a welcome trend for an industry that continues to struggle to return to profitability.

United posted a $473 million profit for the third quarter, thanks to $1.1 billion in federal aid, though a surge in delta-variant cases of Covid-19 weighed on its bottom line. The Chicago-based airline reiterated that it expects its 2022 costs, excluding fuel to be lower than 2019.

The company’s shares were up about 1.7% in premarket trading Wednesday.

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