Yahoo Finance·2026-01-09 14:38Core Viewpoint - The airline sector is expected to rebound, with upgrades for American Airlines Group Inc. and Sun Country Airlines Holdings Inc. based on a favorable industry outlook and company-specific catalysts [1][2] Industry Outlook - The airline industry is poised for recovery by 2026, driven by factors such as a rebound in air travel demand, disciplined capacity growth, and a shift towards premium services [2][3] - Key tailwinds include the aftermath of the U.S. government shutdown, major events like the FIFA World Cup and Olympic Winter Games, and stricter in-office work policies boosting business travel [3] Company-Specific Insights - American Airlines' upgrade to Positive is attributed to its aggressive push into premium offerings, which is expected to narrow the margin gap with competitors [5] - AAL plans to increase premium seats by approximately 30% and lie-flat seats by 50% by 2030, supported by new aircraft acquisitions [5] - Enhancements to passenger experience include free high-speed Wi-Fi for AAdvantage loyalty members starting January 2026 and new amenity kits on select routes [6] Capacity and Revenue Growth - U.S. carriers are expected to maintain supply discipline, with available seat miles (ASMs) projected to grow only in the low-single digits, supporting unit revenue growth [4]