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Jan 6, 2026 4:00 PM

Airline Stocks 2026 Outlook: BofA Upgrades Allegiant (ALGT), Cuts Frontier

The outlook for airlines in 2026 appears positive, as limited capacity growth, strong demand in premium segments, and more favorable year-over-year comparisons are expected to drive higher unit revenues.

Rating Revision

BofA Securities analyst Andrew G. Didora expects Delta Air Lines, Inc. (NYSE:DAL) and United Airlines Holdings, Inc. (NASDAQ:UAL) to lead the industry in 2026 free cash flow, generating over $3 billion and $2 billion, respectively.

On the other hand, the analyst expects economic stimulus to favor low-cost carriers (LCCs).

Also Read: Alaska Air Group’s Hawaiian Airlines Plans OverĀ $600M, Five-Year Investment

Consequently, Didora upgraded Allegiant Travel Company (NASDAQ:ALGT) to Neutral (from Underperform) on its controlled capacity and cost-efficient deployment of the 737 MAX.

Meanwhile, the analyst downgraded ...