US Airlines Q4 2025 Earnings Season Preview: Delta Reports First as Sector Faces Mixed Outlook

This analysis is based on the Seeking Alpha/Visible Alpha report [1] published on January 13, 2026, covering Q4 earnings expectations for major US carriers. Delta Air Lines reports today, followed by United Airlines (January 20), American Airlines (late January), and Southwest Airlines (January 30).

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All four major US carriers show divergent performance heading into earnings season [0]:

Airline	Price	Day Change	3-Month Return	Market Cap	P/E
Delta (DAL)	$71.03	-1.77%	+20.96%	$46.38B	9.94x
United (UAL)	$115.29	-1.73%	+16.16%	$37.32B	11.44x
Southwest (LUV)	$43.85	-1.50%	+37.46%	$22.68B	63.40x
American (AAL)	$16.00	+0.06%	+36.29%	$10.56B	17.55x

Southwest and American have significantly outperformed Delta and United over the past three months, reflecting transformation optimism (LUV) and recovery expectations (AAL) [0].

Airline	EPS Estimate	Revenue Estimate	Key Focus
Delta	$1.53	$15.69B	Premium revenue growth, AmEx partnership [2][3]
United	$3.05	$15.36B	International route performance [6]
Southwest	$0.55	$7.50B	Assigned seating rollout Jan 27 [7][8]
American	$0.41	$14.05B	3.2% revenue growth, margin improvement [1]

demonstrates sector-leading profitability with 27.64% ROE and 9.65% operating margin, consistently beating estimates (Q3 EPS surprise: +8.92%) [0]. Barclays maintains Overweight rating with a raised price target [4].

shows strong fundamentals with 24.87% ROE and the lowest EV/OCF ratio (6.61x), indicating superior cash generation. Barclays raised its price target to $150, implying 30%+ upside [6].

trades at an elevated 63.40x P/E reflecting transformation optimism. JPMorgan’s double upgrade from Underweight to Overweight targets $5 EPS by 2026 versus consensus $2.98, contingent on management providing formal EPS guidance [7][8].

faces profitability challenges with negative ROE (-14.76%) and 4.16% operating margin, though Susquehanna upgraded to Positive on January 9 [0].

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• Labor Costs
  : Up 5.4% YoY, compressing margins sector-wide [1]
• Unit Revenue Pressure
  : RASM expected at 17.50¢ with flat/declining yields [1]
• Load Factor Decline
  : 82.4% vs 82.7% YoY [1]
• Credit Card Policy Risk
  : Trump’s proposed interest rate cap pressured airline stocks; Delta receives $2B quarterly from American Express [5]

• Record Holiday Travel
  : Strong Q4 travel demand could boost results [9]
• Southwest Transformation
  : Assigned seating (Jan 27) could generate $1B pretax earnings in 2026 [8]
• Premium Revenue Outperformance
  : Delta’s premium cabin focus driving margin expansion [3]

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Factor	DAL	UAL	LUV	AAL
Profitability	Low	Low	High	High
Execution Risk	Low	Low	Critical	Moderate
Policy Exposure	High	Moderate	Low	Moderate
Valuation	Reasonable	Reasonable	Elevated	Elevated

: The assigned seating rollout represents a fundamental business model change. Customer backlash has been notable, with some passengers switching to competitors [7]. Implementation disruptions during rollout remain possible.

: Delta’s $2B quarterly AmEx revenue creates significant exposure to potential policy changes [5].

: Southwest’s 63.40x P/E and American’s recent 36% rally may not be sustainable if earnings disappoint.

• United’s $150 price target implies 30%+ upside from current levels [6]
• Southwest’s transformation could unlock substantial value if execution succeeds
• Premium travel demand remains robust, benefiting Delta and United

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: Focus on premium revenue growth trends, AmEx partnership commentary, and 2026 guidance. Strong track record of estimate beats supports confidence [0][3].

: Monitor international route performance and capacity discipline. Barclays’ bullish stance suggests institutional optimism [6].

: Critical to watch for formal EPS guidance adoption and assigned seating rollout reception. JPMorgan’s $5 EPS target requires significant execution [7][8].

: 3.2% revenue growth expectation is modest; margin improvement commentary will be critical given negative ROE [1].

: Labor cost trajectory, capacity discipline, and credit card policy developments warrant ongoing monitoring.

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Note: This analysis provides information to support decision-making and does not constitute investment advice.