Latin America Airlines: 2Q26 Preview: Updating While Riding the Fuel Rollercoaster

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Latin America Airlines: 2Q26 Preview: Updating While Riding the Fuel Rollercoaster

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14 Jul 2026 00:08:20 ET │ 29 pages

Latin America Airlines

2Q’26 Preview: Updating While Riding the Fuel Rollercoaster

CITI'S TAKE

Filipe Nielsen AC

We’re updating models ahead of 2Q earnings for Copa (Buy, TP from $160 to +55-11-4009-5213

$170), LATAM (Buy, TP from $62 to $66) and Volaris (Neutral/HR, TP from filipe.nielsen@citi.com

$7.80 to $8.80). Despite showing the biggest hit from fuel (as seen in

Aeromexico’s results), the impact in 2Q is widely expected and earnings look

somewhat preserved, with fuel partially offset by higher airfares and hedges

(in LATAM’s case). Volatility makes forecasting a challenging task, but

further fuel moderation opens space for better margins in 2H26, that should

start appearing in guidances. Lower fuel may also stimulate capacity growth

in the region and possibly pressure pricing in early-2027 – as we analyze in

this note. Given Copa’s stronger price action recently (Figure 12), LATAM now

becomes our Top Pick and Copa moves to second, followed by Aeromexico

in third. Volaris remains in 11th place (see our Stock Ranking).

Fuel volatility during 2Q earnings — Oil and jet fuel prices remain very volatile,

retracting closer to pre-shock levels after almost doubling from pre-conflict.

Volatility put aside, if the downward trend persists, we believe the ongoing RASM

passthrough (of ca. 18% to 23%) may transform soft 2Q results into strong 2H

guidances. Copa and LATAM look better positioned to offset fuel in 2Q and show the

best 2H reversion, while Volaris may still feel the pressure from lower fleet utilization

and demand challenges – a cross-read supported by Aeromexico’s guidance.