Airlines: Airline thoughts ahead of our Industrials, Transports, and Airline Key Leaders Conf

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Airlines: Airline thoughts ahead of our Industrials, Transports, and Airline Key Leaders Conf

1Q26 commentary. ALGT – Allegiant

ULCC – Frontier Airlines

Spirit ceases operations: what is next?

RJET – Republic Airways HoldingsAfter Spirit ceased operations, we wrote the airline was 2.3% of the industry year-to-

date through April (see our report, BofA Seat Tracker: No more Spirit in the Skies), and SKYW – SkyWest Inc

removing the airline’s scheduled capacity over the next 6 months reduces domestic AC CN – Air Canada

industry growth to +1.7% on average from +3.1%. Industry load factors should also RASM – unit revenue

benefit (likely 100-125bps). Now, we will listen to other airlines’ plans on how they will

CASM-ex – unit cost excluding fuelbackfill Spirit’s routes. Some already started after Spirit declared bankruptcy in August

2025, but JBLU quickly announced plans to expand Fort Lauderdale capacity, adding

service from Nashville, Detroit, Houston, and Chicago O’Hare. See the most recent BofA on USA

report for methodology, limitations and

M&A: will anything really get done? disclaimers related to BAC aggregated

M&A headlines came to the forefront in mid-April after UAL discussed a potential deal credit and debit card data.

for AAL (see our report, Thoughts on a potential UAL and AAL combination). The two

airlines would have had a 38% share of domestic capacity, with the top 3 airlines

controlling 75% of domestic flying. We are constructive on consolidation, though believe

that any potential deals will likely face significant scrutiny from regulators and other

groups, particularly following Spirit’s ceasing of operations.

Capacity has been reduced, watching for cuts and backfill

Most airlines this earnings season spoke conservatively regarding capacity growth in the