TD Cowen Weekly Airline Shuttle

Research evidence excerpt

TD Cowen Weekly Airline Shuttle

TD SECURITIES (USA) LLC SECTOR NOTE

June 19, 2026

■Consumer: Airlines TD Cowen Weekly Airline Shuttle

Tom Fitzgerald, CFA THE TD COWEN INSIGHT

646 562 1304

Airline stocks rose on Iran MOU. 2Q–3Q revenue outlook remains strong. Key debate remains

tom.fitzgerald@tdsecurities.com

whether carriers can sustain fare gains versus past givebacks. Supportive factors include

disciplined capacity, ULCC weakness, Spirit liquidation, and premium mix. Risks center

on competitive disruption, especially Frontier. Pricing discipline is critical into 2027. Spirit

advances ATL lease sale to Delta.

To Give Back, or Not to Give Back?

Shares of US airlines unsurprisingly had another positive week following news of the MOU

between the US and Iran.

The revenue outlook for 2Q and 3Q remains robust, with investors continuing to debate the

extent to which airlines can hold onto this year's fare increases and avoid a repeat of the

pricing give back that occurred in 2015.

Factors that position the sector to hold onto gains include a more rational overall growth

environment, the weak starting position of ultra-low-cost carriers, Spirit's liquidation, the mix

tailwind from increasing the amount of premium seating, and consumers having relief from

lower gas prices at the pump.

If risk asset prices remain elevated this fall, that should also be supportive of corporate

demand as well as shoulder season international travel by older cohorts.

However, concerns remain that one or more players will upset the apple cart. Frontier

increasing utilization is often cited as a risk. We think the determining factor on that front will

be whether they are adding new markets vs adding service to existing markets on off-peak

days.