US and Canada Airlines: 2026 Q2

Morningstar

Nicolas Owens

Research

33 Pages

Morningstar examines how fuel shocks, softer leisure demand, rising structural costs, and easing supply constraints are reshaping North American airlines. Passenger traffic through Q2 was only 0.4% above 2025, while nonfuel unit costs have risen 28% since 2019, favoring premium carriers but pressuring future industry profitability.

Key Takeaways

Demand barely grows: Just 0.4% more passengers boarded through Q2 2026 than in 2025, while non-US international arrivals trailed 2019, 2024, and 2025.
Costs reset higher: Nonfuel unit costs rose 28% since 2019, adding $37 billion of 2024 expense and reaching 12% of industry operating costs.
Valuations look stretched: All five covered airlines traded above historical average EBITDAR multiples, with price/fair-value ratios ranging from 1.13 to 1.68.
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