United Airlines CEO Kirby Unfazed By Potential Spirit Airlines Bailout

United Airlines CEO Scott Kirby is not concerned that a potential government bailout for Spirit Airlines will affect top legacy carriers. But other airlines, he said, might be fuming over the pending move.

During a discussion on United’s first quarter earnings call, Kirby was asked for a response to a Wall Street Journal report indicating the U.S. government could loan Spirit roughly $500 million and receive warrants for a potential stake in the beleaguered South Florida-based carrier.

The rapid run-up in fuel prices has spurred speculation about Spirit’s survival as it works to exit its second stint in Chapter 11 in roughly a year. The ULCC has been aiming to exit the process by early summer.

“For us, I don’t think that this is nearly as big a deal as for others that are in the more commoditized space. If I was working at one of the airlines that depended on more commoditized travel, I’d be irate, probably, about this,” Kirby said. He believes United has distanced itself so much from other carriers, if Spirit fails or keeps operating, “I don’t think it has much effect on United one way or another.”

Kirby described the current crisis as not severe enough for an airline bailout. Pointing to the same conclusion he has made for several years, harkening back to the Biden administration, Kirby said, “The Spirit business model is fundamentally flawed, and it’s going to fail.”

United’s focus in the short term, he said, is working to recapture 100% of its increase in fuel costs, which jumped 12.6% year-over-year in the first quarter to $3 billion.

Late in the first quarter, the airline pushed through five “broadly successful” fare increases, explained Chief Commercial Officer Andrew Nocella. The airline also plans further capacity adjustments of flat to up to 2% growth in the back half of 2026 for a overall 5% reduction for the year. Similar to other airlines, United plans to cut marginal capacity on off-peak days and red-eye flights.

With the fare increases, United saw a rapid rise in yields. Nocella observed that within roughly seven-to-eight weeks, yields went from growing 2-3% year-over-year to 18-20%.

The fare hikes have “been significant across the board; however, global long-haul increases have been a bit stronger than domestic,” Nocella said. “I think there have been changes in overseas pricing behavior that have actually surprised me.”

Although the price increases are sticking and demand remains strong, United does believe some elasticity in demand will occur. “Econ 101 makes us believe it’s coming,” Kirby said.

For the second quarter, United expects to recapture 40-50% of its fuel cost increase and 70-80% in the third quarter. “Realistically, there probably isn’t enough time to make up 100% of the fuel price increase this year, but I feel very good about 100% recovery and getting to double digit margins in 2027,” Kirby said. He also expects to require less capacity growth in 2027 “than we were planning just two months ago.”

United has cut its financial guidance for 2026, and now the airline expects earnings per share of $7-$11 compared with prior estimates of $12-$14.

United’s revenue in the 2026 first quarter grew 10.6% year-over-year to $14.6 billion, and expenses increased 8% to $13.6 billion. The company’s first-quarter net income was $699 million, compared to $387 million a year ago.