11:23 AM EDT, 07/01/2025 (MT Newswires) -- Delta Air Lines ( DAL ) , United Airlines (UAL), and American Airlines ( AAL ) are expected to report Q2 results generally in line with outlooks, while investors closely watch for signs of improving demand and further H2 capacity reductions, BofA Securities said in a Tuesday note.

BofA analysts said that Transportation Security Administration passenger throughput and Bank of America ( BAC ) card spending on airlines declined in June, indicating softening consumer demand. However, domestic airline capacity growth is also seen decreasing, especially in August and September, reflecting the industry's efforts to balance "supply with demand."

Travel from the US to Europe remains "solid" but inbound travel from Europe to the US is down and "has been weaker," which may weigh on revenue in the latter part of Q3, according to the note.

BofA said that operational challenges at Newark Liberty airport are weighing on United's Q2 performance and it expects lower revenue compared to consensus forecasts.

Referring to ultra low-cost airlines like Frontier (ULCC) and Allegiant (ALGT), the analysts said they face outsized pressure due to price-sensitive customer bases and falling unit revenue. BofA also cut 2025 EPS forecasts for both, citing weak card data, seasonal exposure, and deteriorating demand.

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