TD Cowen Capacity Tracker

Research evidence excerpt

TD Cowen Capacity Tracker

Global Research SECTOR NOTE

July 21, 2026 TD Cowen Capacity Tracker

■Consumer: Airlines

Tom Fitzgerald, CFA THE TD COWEN INSIGHT

646 562 1304 Systemwide US capacity is scheduled to shrink 0.4% y/y in 3Q26, with domestic up 0.2% and international down 1.9%.

tom.fitzgerald@tdsecurities.com US airlines continue to cut supply from forward schedules in response to higher fuel prices, with investors laser focused

on potential cracks in air travel demand. Industry margin laggards and highly leveraged airlines will be under the most

pressure to prune unprofitable flying.

Since our last report, there have been minimal changes to 3Q26 schedules. Alaska (-2.0pts) and JetBlue (-1.7pts) made the

largest changes to 4Q26 schedules, while Frontier's full 4Q schedule is now included in the data.

Investors remain focused on how well airlines can maintain higher air fares as fuel prices ease. We continue to see strong

y/y price increases in both domestic and international markets. Spirit's demise (see notes here and here) should further

raise the floor on economy fares. See our recent 2Q26 preview and updates on DAL and UAL for more.

We continue to view United, Delta, and American as best positioned to produce healthy RASM given their exposure to

corporate, premium and international, as well as the high floor provided by loyalty revenues. We also rate shares of Alaska

(see recent SMIDcap sweetheart note here) and Southwest Buy (see recap of recent meetings with management in Canada

here).

Systemwide US capacity is scheduled to shrink 0.4% y/y in 3Q26, with domestic up 0.2% and international down 1.9% (see

p. 3–5). Capacity growth exhibits across airlines and markets follow on p.3-73.