Susquehanna upgrades American Airlines and Sun Country on projected demand recovery

In a bullish lawsuit enactment released contiguous arsenic a preview for Q4 earnings, Susquehanna’s Christopher N. Stathoulopoulos upgraded American Airlines Group Inc. (AAL) and Sun Country Airlines Holdings Inc. (SNCY) to Positive ratings, citing a favorable manufacture outlook and company-specific catalysts. Stathoulopoulos raised AAL’s terms people to $20 per stock from $14, and SNCY’s terms people to $20 per stock from $12.

The upgrades travel arsenic the hose assemblage braces for a rebound successful aerial question demand, disciplined capableness growth, and a displacement toward premium services that could bolster margins done 2027. Stathoulopoulos, a seasoned airlines analyst, emphasized that these factors make a “constructive cardinal backdrop” for prime carriers, peculiarly those leveraging premium offerings and divers gross streams.

The broader hose manufacture is poised for betterment successful 2026, according to the note. Stathoulopoulos highlights respective tailwinds driving demand: a rebound pursuing the caller U.S. authorities shutdown and FAA-mandated docket reductions; large events similar Americas250 celebrations, U.S. midterm elections, the FIFA World Cup, and the Olympic Winter Games; casual year-over-year comparisons owed to anterior macro and geopolitical volatility; imaginable economical stimulus; stricter in-office enactment policies boosting concern travel; and sustained appetite for premium products.

Crucially, helium points to U.S. carriers’ proviso discipline, with disposable spot miles (ASMs) expected to turn lone successful the low-single digits—a “RASM-supportive baseline” that should forestall oversupply and enactment portion gross growth.

For American Airlines, Stathoulopoulos’ upgrade from Neutral to Positive is based connected the carrier’s assertive propulsion into premium offerings, which helium believes volition constrictive the borderline spread with peers similar Delta Air Lines (DAL) and United Airlines (UAL). AAL is “leaning into its premium products,” the expert notes, with initiatives designed to alteration the hose into a technology-driven merchandising powerhouse. Key efforts see expanding high-margin premium inventory: AAL plans to summation premium seats by astir 30% and lie-flat seats by 50% by 2030, aided by caller Boeing 787-9P and Airbus A321XLR aircraft. Lounge expansions are besides underway, specified arsenic a caller Flagship and Admirals Club astatine Philadelphia (PHL) successful May 2025, a grab-and-go conception astatine Charlotte (CLT), and further Flagship lounges successful Miami and Charlotte.

Enhancing the rider experience, AAL volition rotation retired escaped high-speed Wi-Fi for AAdvantage loyalty members crossed its full narrowbody and dual-class determination fleets starting January 2026. New amenity kits and artisan nutrient and beverage options connected prime planetary and transcontinental routes further underscore this premium focus, positioning escaped Wi-Fi, in-seat power, entertainment, and curated F&B arsenic “core to the product/drivers of marque equity.”