United Airlines Stock Is Taking A Plunge: What's Happening?

United Airlines Holdings Inc (NASDAQ:UAL) shares are taking a dip on Friday. CEO Scott Kirby warned that the sharp jump in fuel prices following the U.S.–Israel–Iran conflict will have a "meaningful" impact on the airline's second‑quarter results. Here’s what you may want to know.

• United Airlines Holdings stock is taking a hit today. Why is UAL stock falling?

Fuel Prices Surge, Pressuring Airline Margins

Kirby said the rapid rise in fuel costs — which have surged 58% since the war began — since Saturday's U.S.–Israel strike on Iran will significantly affect the company's financial performance this quarter, CNBC reported. Speaking at an event at Harvard's School of Engineering and Applied Sciences, he added that if prices stay elevated, the impact will carry into the second quarter as well.

Jet fuel hit $3.95 per gallon on Thursday, according to the Argus U.S. Jet Fuel Index. United does not hedge fuel prices, meaning it absorbs the full impact of price swings. With a Boeing 737‑800 holding nearly 7,000 gallons of fuel, the cost increase translates into a substantial added expense for each flight.

Higher Ticket Prices Likely On The Horizon

When asked how quickly rising fuel costs will affect airfares, Kirby said the impact will "probably start quick." Even so, he emphasized that travel demand remains strong, with booked revenue up 20% from last year. He said demand "has not taken even a tiny step back."

Kirby's comments come just ahead of a major JPMorgan airline conference where carriers typically update their financial outlooks. His remarks offer an early look at how global airlines are being hit by the conflict, which has stranded more than a million travelers and led to over 25,000 flight cancellations.

The Stock’s Technical Picture

United Airlines is currently positioned below all key moving averages, indicating a bearish trend. With the stock trading 16.4% below its 20-day SMA and 17.1% below its 50-day SMA, traders should be cautious as this suggests weakness in the current price action.

The RSI is at 35.15, which is considered neutral but leans towards oversold territory, indicating that while the stock isn’t in a strong oversold condition, there could be limited upward momentum in the near term. MACD is below its signal line, indicating bearish pressure on United Airlines.

Key support is at $88.50, while resistance is set at $110.00. If the stock approaches the support level, it could signal a potential reversal or continuation of the downtrend, depending on how it reacts at that point.

The death cross in May, when the 50-day SMA crossed below the 200-day SMA, adds to the bearish sentiment surrounding United Airlines. This crossover often indicates a longer-term trend change, and traders should be mindful of its implications.

Over the past 12 months, United Airlines stock has gained 6.40%, which suggests a recovery from earlier lows. However, the current technical setup shows that the stock is struggling to maintain upward momentum, despite this longer-term positive performance.

Currently, the stock is trading at 59.4% of its 52-week range, indicating it’s positioned closer to the lower end. This suggests that there may be limited upside potential unless the stock can break through resistance levels.

UAL Price Action: United Airlines shares were down 3.71% at $91.89 at the time of publication on Friday, according to Benzinga Pro.

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