Best Possible Outcome for the Airlines?

Research evidence excerpt

Best Possible Outcome for the Airlines?

Equity Research

Earnings Preview — June 30, 2026

Airlines

2Q26 Airlines Earnings Preview

Our Call Christian Wetherbee

We're taking up estimates and our price targets as fuel falls and demand holds. The "skip Equity Analyst | Wells Fargo Securities, LLC

Christian.Wetherbee@wellsfargo.com | 212-214-8053

'26" earnings thesis is set up well and shares can perform even post recent rally. We

Robert H. Salmon, CFAremain most constructive on premium carriers United and Delta.

Equity Analyst | Wells Fargo Securities, LLC

Robert.H.Salmon@wellsfargo.com | 212-214-5016

Iran Conflict the Best Possible Outcome for Airlines? - One look at the chart of jet fuel Ryan Deveikis

suggests it could be. The initial reaction to the conflict yielded ~7 rapid fare increases with Associate Equity Analyst | Wells Fargo Securities, LLC

broad participation as carriers leaned into recouping fuel collectively. The fuel spike cut Ryan.Deveikis@wellsfargo.com | 212-214-8040

capacity and likely aided the liquidation of Spirit, further rationalizing the space. Fuel's Matthew Hortopan

steady decline since early April means airlines can recoup fuel quickly and the out-year Associate Equity Analyst | Wells Fargo Securities, LLC

earning trajectory has been raised. Matthew.F.Hortopan@wellsfargo.com | 212-214-5009

2Q Estimates Moving Higher - We're taking 2Q26 EPS estimates up 8% on average

across our coverage, with revenue growth expected to come in at/above the high end of

guidance. Fuel should also be a tailwind for Delta and United, given more conservative

guides, while the recent decline helps offset headwinds for American and Southwest.

CASMx inflation is a partial offset, particularly for United and Delta, which have labor