Certain Major US Airlines Could Miss Third-Quarter Bottom-Line Views Amid Fuel Headwinds, UBS Says

03:28 PM EDT, 09/10/2026 (MT Newswires) -- Certain major US airlines could miss market expectations for their third-quarter earnings amid higher fuel prices and operational disruptions from bad weather, UBS Securities said in a note e-mailed Thursday. The brokerage expects Delta Air Lines (DAL), United Airlines (UAL) and American Airlines' (AAL) bottom-lines for the September quarter to fall short of Wall Street's views, while Southwest Airlines (LUV) and Alaska Air Group (ALK) are seen delivering beats. "We see modest downside to (third-quarter earnings per share) for some players on the back of higher fuel for (the third quarter versus) guidance, as well as irregular operations from uneven weather in July/Aug," UBS analysts Atul Maheswari and Thomas Wadewitz said in a note to clients. US crude oil prices surged past $100 per barrel Thursday, a day after global benchmark Brent breached the same threshold amid intensifying tensions between the US and Iran. The renewed flare-up has sparked fears of prolonged supply disruptions. Still, airline demand seems have stayed strong so far in the third quarter despite additional rounds of price hikes last month amid higher fuel prices, UBS said. "We think these price increases have been more localized by markets as opposed to the broad-based increases that the industry witnessed in the immediate aftermath of the Iran war," Maheswari and Wadewitz wrote. Higher fuel prices could further dent airlines' fourth-quarter earnings, but a 16% drop in the US Global Jets ETF -- which groups the major US airlines -- since the start of August shows investors have already priced in the impact, according to the note. UBS slashed its 2026 and 2027 bottom-line outlooks for the major airlines it covers, largely to factor in higher fuel prices. The brokerage also lowered its respective price targets on the stocks of United, Delta Air, Alaska Air, Southwest, American and JetBlue Airways (JBLU). While positioning was net short on the sector roughly a month ago, it is now likely closer to net neutral amid a pullback in stocks, according to the note. "We have increasingly fielded questions on what could be the potential silver lining from upcoming airlines presentations next week," the analysts wrote. "On that point, it's possible there might be upside to consensus (fourth-quarter revenue per available seat mile/revenue) given strong demand and the recent price increases." UBS named United, Southwest, and Alaska Air as its "top near-term picks." Price: 78.17, Change: -0.58, Percent Change: -0.74