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United Airlines CEO Oscar Munoz delivers remarks in New York in 2016. Munoz addressed United shareholders on May 23, 2018. He said the airline has not changed its forecast for full-year earnings.
Richard Drew / AP
United Airlines CEO Oscar Munoz delivers remarks in New York in 2016. Munoz addressed United shareholders on May 23, 2018. He said the airline has not changed its forecast for full-year earnings.
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As the summer travel season kicks off, passengers could end up paying more to fly because airlines are paying more for fuel, United Airlines CEO Oscar Munoz said after the company’s annual shareholders meeting Wednesday.

Munoz said higher jet fuel prices are already putting pressure on fares.

Chicago-based United doesn’t directly hike airfares when fuel prices increase, but “natural market forces” push fares up, Munoz said, and the airline has already seen that happen over the last two to three quarters.

“It’s just a natural thing that has occurred in this industry,” he said.

In the first three months of this year, United paid an average of $2.11 per gallon of fuel used for mainline and regional flights, an increase of about 23 percent from the $1.71 it paid during the same period last year, the airline said in April.

That $2.11 per gallon cost is slightly higher than the $2.03 average for all major carriers in the first three months of this year; the average cost was up 22.2 percent from the same period last year, according to the U.S. Bureau of Transportation Statistics.

Last month, American Airlines blamed higher fuel prices for a decline in its first-quarter earnings, saying the increased cost added $412 million to its expenses.

Despite higher fuel prices, United has not changed its forecast for full-year earnings, Munoz said.

Munoz also said the airline is looking at candidates to replace the airline’s chief financial officer, Andrew Levy, who last week announced his decision to leave the airline. Levy was brought in from budget carrier Allegiant Travel Co. last year.

“He’s always been an entrepreneurial guy. … I think he came in and did what we asked him to do and what he wanted to do,” Munoz said.

At the meeting, Munoz faced questions from United-employed catering workers in Newark, N.J.; Houston; Denver; Honolulu; and Cleveland who accused the airline of attempting to quash their efforts to unionize.

Munoz denied that the airline was threating workers involved in those efforts, but said the airline would “educate” workers about benefits currently provided that would become subject to negotiations.

“That’s not a threat, just a fact,” he said.

Catering workers in Chicago are employed by a United subcontractor and are already unionized.

Another attendee questioned the airline’s decision to stop providing discounts to National Rifle Association members traveling to the organization’s annual meeting in the wake of a February school shooting in Parkland, Fla., that left 17 dead. The question came from Justin Danhof, director of the National Center for Public Policy Research’s Free Enterprise Project, which says it supports conservative investors on issues including gun rights, health care, immigration and taxes.

One of the victims of that shooting was the daughter of a United pilot, Munoz said.

“It wasn’t political; it was a little bit personal,” he said.

lzumbach@chicagotribune.com

Twitter @laurenzumbach

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