2Q26 earnings preview: favorable trends while watching 4Q capacity

Research evidence excerpt

2Q26 earnings preview: favorable trends while watching 4Q capacity

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Airlines

2Q26 earnings preview: favorable trends

while watching 4Q capacity

Price Objective Change

Strong pricing, lower fuel sets up positive earnings season 01 July 2026

We see a constructive setup into 2Q26 earnings, driven by strong demand trends and Equity

significantly lower fuel prices. Industry pricing has remained firm following the spring United States

fare increases, while booking trends suggest a greater share of 3Q26 demand remains Airlines

exposed to higher fares. Combined with relatively modest capacity growth through the Andrew G. Didora, CFA

summer, we believe these dynamics support continued unit revenue strength into 3Q26, Research Analyst

resulting in upward revisions to our estimates and price objectives across the group. BofAS+1 646 855 2924

andrew.didora@bofa.com

Demand: fare increases continue to hold; spend healthy John Gellene, CFA

Recent revenue commentary and spending data continue to point to healthy demand ResearchBofAS Analyst

trends. Airline spending growth accelerated into June, while spend per transaction has +1 646 855 5193

john.gellene@bofa.com

remained firmly positive since mid-April, suggesting fare increases have largely held. We

believe these dynamics support upside to 2Q26 revenues and continued unit revenue

strength into 3Q26, particularly as a larger portion of the booking curve remains exposed

to post-fuel-spike pricing. Unit revenues could improve 225-300bps sequentially into 3Q,

but our estimates are a bit more conservative given September is more off-peak.

Supply: watching 4Q26 growth as summer capacity is flat Exhibit 1: POs raised across the group