Tough to call the outlook for airline stocks in absolute terms, which is almost entirely dependent on the duration of the downturn in travel demand and the shape of the recovery. We expect airlines to eventually have a very good multi-year run as demand, when it does recover, will almost certainly recover faster than supply given the constraints that levered balance sheets will place on capex and a likely “once bitten, twice shy” mentality from management, as we have seen in the first few years of prior recoveries. At that point, we’d favor UAL, where we see equity upside into the $60’s. Until that day comes however, we’d expect LUV to continue to outperform the group given that it still has far-and- away the cleanest balance sheet and most defensive posture overall. 

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