US Airlines

Research evidence excerpt

US Airlines

Global Research

23 June 2026ab

US Airlines Equities

Americas2Q Preview: In-line(ish) 2Q Likely, But Expecting

3Q Guides Significantly above Current Airlines

Consensus Atul MaheswariAnalyst

atul.maheswari@ubs.com

+1-212-713 4103

Expecting 2Q prints and 3Q guides to be a positive catalyst for the sector Thomas Wadewitz

Analyst

The current set-up is favorable for the US Airlines sector. Jet Fuel price has declined -30% thomas.wadewitz@ubs.com

over the past month while demand has continued to hold firm despite nearly around +1-212-713 6116

20% increase in fares. At the same time, supply is tepid with 3Q ASMs set to shrink

slightly YoY. This "perfect" combo is likely to push 3Q EPS guides well above current

consensus, driving upward earnings revisions following the reporting season. While JETS

has rallied ~15% over the past 2 weeks, we see RASM/EPS momentum as helping

support continued upward trajectory in the US airline stocks.

While 2Q revenues are likely to be up LDD% to mid-teens % for the top US

Airlines (high-teens for LUV), we see potential for 3Q revenues growth to

accelerate a bit relative to 2Q as greater portion of 3Q revenues are likely to be

booked at higher fares relative to 2Q. Plus, 3Q fuel price growth per gallon

moderates to 25-30% YoY (per current curve) vs. 75-80% YoY for 2Q. While

there are some CASM-ex headwinds for certain players, we see the positive

revenue and fuel dynamics are driving the expected EPS upside for 3Q.

For 2Q, we expect broadly in-line EPS with some variability from airline to

airline. Our checks indicate solid demand persisted through 2Q, but this was

broadly contemplated in 2Q outlooks provided by the companies. In addition,

jet fuel has broadly trended in-line with what was assumed in the guide for

most players.