United Airlines wants even higher ticket prices. It'll get them - with or without the Iran war.

By Kenneth Rapoza

 United's new 'luxury' strategy is a risky bet for investors when fares and complaints are sky-high 

 Since January 2021, airline ticket prices have risen by more than 50%. 

 Summertime is near, and airline ticket prices are jumping. That is, if you can even get off the ground. One major U.S. airline aiming to profit most from higher travel costs is United Airlines (UAL). The company's investors will like this higher-pricing environment; United's stock is outperforming the broad market. But consumers will not like it one bit. 

 First, the price increases. In February, the Airline Fares index hit 280 - a level typically reached in May. Expect the March result to be closer to 300. The last time this index was over 300 was the summer of 2022, during the COVID-19 pandemic, when Americans were tired of being cooped up in their homes and the federal government sent people $2,000 stimulus checks. 

 Airline travel is one of those discretionary expenses where price increases hit especially hard because the upfront cost is so high - often several hundred dollars, or more than $1,000 for a family of four flying cross-country. For many people, flying isn't optional; it's how they visit family and friends. Making matters worse, the flight experience itself has deteriorated, according to a 2025 year-end customer satisfaction survey by the American Customer Satisfaction Index (ACSI). 

 Higher ticket prices only add insult to injury. Since January 2021, airline ticket prices have risen more than 50% versus 24% for core U.S. inflation. 

 Crowd out the competition 

 United has positioned itself as the domestic "luxury" liner. The airline will be rolling out higher-priced economy and business classes. 

 United is also trying to crowd out rivals including American Airlines (AAL). At Chicago O'Hare International Airport, for example, United is overloading its schedule with new flight offerings this summer. 

 United CEO Scott Kirby said on an earnings call in January that United would add "as many flights as are required" to stop rivals from gaining additional gates in Chicago. United announced 750 flights per day this summer at O'Hare - 200 more than American and the largest schedule ever flown by any airline operating there. It's an increase of over 200 flights compared with the summer of 2025, when United flew 541 daily flights at O'Hare, one of its three main U.S. hubs. 

 United is about to make the busiest airport in the U.S. even busier. Forbes reported in December that United was basically trying to "dehub" American from Chicago. Southwest Airlines announced in March that it will abandon O'Hare this summer. 

 If you're flying out of O'Hare, you stand a 1-in-3 chance of not leaving on time - or at all. O'Hare ranks as one of the worst airports in the country, far below Atlanta's Hartsfield-Jackson Atlanta International Airport, which Delta Air Lines (DAL) calls home. 

 United is also the biggest player at Dulles International Airport outside Washington, D.C. and San Francisco International Airport - two of the most expensive airports in the country for flights. 

 Some surveys of U.S. airlines show stable passenger satisfaction, but other data tell a different story: complaints are rising; confidence is slipping and travelers are increasingly frustrated with delays, crowding and higher prices. Customer defection is of increasing concern for both airline management and shareholders, according to ASCI. Defections typically are preceded by customer dissatisfaction and complaints, along with  concentration at key hubs and a lack of substitutes. 

 Defections to other airlines are down, mostly due to market concentration in key cities. But rising U.S. inflation could hurt United and its shareholders this time around, even as customer demand remains. 

 "In well-functioning markets, buyer satisfaction and seller profits move together," said Claes Fornell, ACSI's founder. "Decoupling seller profit from buyer satisfaction impedes economic growth and slows innovation. Buyer surplus stagnates and inflation accelerates." 

 These are not the signs of a healthy market. And United's pricing power faces headwinds, inflation or no inflation. 

 In February, a month after the United earnings call, the Federal Aviation Administration said it wanted fewer flights overall at O'Hare, citing overscheduling and the "severe congestion" due to higher flight counts following expansions by both American and United. This puts the FAA in direct conflict with United. The FAA said United's expansion will stress the Chicago airport's runway, terminal and air-traffic control systems. 

 United investors also should bear in mind this finding from ASCI's latest customer survey: "History is clear as to what will happen to firms that do not create strong customer relationships based on profit for the seller and satisfaction and utility for the buyer. They tend to occupy the bottom of the customer surveys." 

 Kenneth Rapoza is an analyst for the Coalition for a Prosperous America, which represents U.S. producers and workers. He is a former journalist who has reported from Brazil and covered the BRIC economies. 

 Read: Why Delta and United can fly above the turbulence in air travel 

 More: Flights will keep getting more expensive and harder to find. Here's how much worse it could get. 

 -Kenneth Rapoza 

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04-06-26 0811ET

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