United Airlines slashed its 2026 earnings outlook Tuesday as it grapples with a surge in jet fuel prices due to the Iran war, but CEO Scott Kirby said demand remains strong.

United said it could earn between $7 and $11 a share on an adjusted basis this year, down from its previous forecast of between $12 and $14 a share that it released in January, more than a month before the U.S. and Israel attacked Iran.

Wall Street had already been adjusting its expectations for the year because of higher fuel. Analysts polled by LSEG had forecast that United’s adjusted, full-year earnings would be $9.58 a share.

The carrier, like others, is trimming some of its planned flying this year to reduce costs. Lower capacity can drive up airfare, with fewer seats on the market.

For the second quarter, United forecast adjusted earnings of between $1 and $2 a share. Analysts had expected $2.08 a share for the quarter. United estimated its fuel price would average $4.30 a gallon in the second quarter.

The carrier said it expects its revenue to cover between 40% to 50% of the fuel price increase in the second quarter, as much as 80% in the third and between 85% and 100% by the end of the year.

United reiterated that it is tweaking its schedules to adjust to higher fuel, with capacity in the second half of the year expected to be flat to up about 2% on the year. It grew 3.4% in the first quarter.

Here is what United Airlines reported for the quarter that ended March 31 compared with what Wall Street was expecting, based on estimates compiled by LSEG:

• Earnings per share: $1.19 adjusted vs. $1.07 expected
• Revenue: $14.61 billion vs. $14.37 billion expected

“Bookings are strong,” Kirby told CNBC’s “Squawk Box” on Wednesday.

United and the rest of the industry have become more reliant on travelers who are willing to shell out more for flights and bigger seats, and who are less affected by price increases.

Alaska Airlines pulled its 2026 forecast on Monday because of higher fuel prices. It has raised fares about $25, CEO Ben Minicucci told analysts Tuesday.

Kirby floated a potential merger with American Airlines to a Trump administration official earlier this year, according to a person familiar with the matter, but President Donald Trump said he was against the idea.

“I don’t like having them merge,” he told CNBC’s “Squawk Box” on Tuesday morning. He said he would like someone to buy struggling discount carrier Spirit but he also suggested that the federal government could “help that one out.”

American also rejected the idea of a merger with United last week.

When asked about floating the merger, Kirby declined to confirm the meeting to CNBC’s “Squawk Box” on Wednesday but said: “We want to create a truly global airline.”

Kirby reiterated his view that the U.S. is at a deficit in international air travel as customers fly on international competitors, some of which are state owned.