Hormuz reopens

Alaska Air Group is a scheduled passenger airline (Alaska, Horizon, Hawaiian) with no non-airline segments, so the whole business sits in leg 1 of the thesis. its FY2025 10-K puts aircraft fuel at $2,879m, 21% of total operating expenses in the pre-closure year, bought on US West Coast and Singapore jet fuel benchmarks, and states that no hedge positions remain open as of December 31, 2025 — the hedge programs at both Alaska and Hawaiian were suspended and settled. pass-through of a lower crude price and narrower jet crack to cost is therefore near complete and fast. third-party coverage in 2026 attributes a $1.8bn fuel cost increase and a swing to quarterly losses to the closure, which is the cost base the thesis unwinds. unhedged airline, fuel the largest variable line, market cap about $4bn → pure play for the airlines angle.

Copa Holdings is a single-segment passenger and cargo airline operating from its Panama City hub, NYSE-listed with a market cap near 5.3 billion dollars. the business is entirely air transportation, so the thesis mechanism — jet fuel bought unhedged at spot, cost falling faster than fares — is the whole company. its FY2025 20-F states fuel was about 33.3% of operating expenses in 2025 (35.2% in 2024, 37.6% in 2023) and that the company holds no fuel hedge contracts and has adopted a strategy of remaining unhedged. an independent Zacks report on Q2 2026 shows fuel expense more than doubled to about 450 million dollars against opex of about 968 million dollars, roughly 46% of cost at closure-era prices, with ex-fuel unit cost flat — the squeeze the reopening would reverse. unhedged, fuel-heavy, pure airline → 1.0 for the airlines angle.

Southwest Airlines is a single-segment US domestic passenger carrier (SIC 4512, nearly 800 Boeing 737s, point-to-point short-haul network) with no non-airline business. the thesis mechanism — spot jet fuel falling faster than fares — is the whole cost story here: aircraft fuel and related taxes were $2,152m of $8,043m Q3 2026 operating expenses (26.8%, 24.8% for the nine months), the largest variable line. the company discontinued its hedging program in 2025, terminated all contracts that ran through 2027 and states it does not intend to add derivatives, so the pass-through from crude and jet crack to reported cost is complete and immediate — the 10-Q quantifies it at $5.7m per one-cent-per-gallon move on roughly 573m gallons a quarter. for the airlines angle this is the cleanest unhedged expression in the US set → pure play, 1.0.

American Airlines Group is a single-business network passenger and cargo airline (SIC 4512, scheduled air transportation) — mainline plus wholly-owned and contracted regional carriers under capacity purchase agreements where AAL pays 100% of fuel. the FY2025 10-K puts aircraft fuel at $10.7bn, 20% of total operating expenses (22% in 2024) at a $2.39/gal average, second only to labour at 38%, and states there are no fuel hedging contracts outstanding and the policy is not to hedge, so the company is fully exposed to jet fuel at spot. every dollar of revenue is airline revenue and the unhedged jet-fuel line is the thesis's direct leg 1 mechanism, so against the airlines angle this is a pure play at 1.0. a 1c/gal move is about $50m of annual fuel expense; a large unhedged floating-rate debt load adds a funding-cost channel if lower oil eases rates. trailing earnings are negative, which does not affect business-mix purity.

Allegiant Travel is a US domestic low-cost leisure airline flying nonstop from under-served cities to leisure destinations; after selling Sunseeker Resort in September 2025 the airline is the whole business. the FY2025 10-K puts fuel at approximately 24.9 percent of total operating expenses — the top of the brief's 20 to 30 percent range — and states the company does not use derivatives to hedge fuel and has no plans to, so a lower crude price and narrower jet crack pass to cost almost in full within weeks. leisure fares and ancillary revenue reset more slowly than spot fuel, which is the margin mechanism in leg 1. the May 2026 acquisition of Sun Country adds a cargo and charter sliver where fuel is largely passed through, which keeps this a notch below a perfect 1.0, but the combined company remains a scheduled passenger airline with unhedged spot fuel as its largest variable cost — pure play for the airlines angle.

JetBlue is a single-segment US passenger airline (SIC 4512, one operating segment: air transportation services) flying domestic, Caribbean, Latin America, Canada and transatlantic routes. jet fuel is its largest variable cost: 21.8% of operating expenses in FY2025 and about 29% in Q3 2026 ($868m of $2,956m) after the closure-driven price spike. the FY2025 10-K states no fuel hedging contracts were outstanding at year-end 2025 or 2024, so a fall in Brent and the jet crack flows to cost almost in full within weeks — the exact leg 1 mechanism, with nothing else in the business diluting it. for the airlines angle this is the thesis itself → 1.0 pure play. earnings leverage is amplified by losses (ttm diluted eps −2.68) and $8.8b of debt, so the unit-cost relief matters more here than at profitable peers, but the same leverage is the risk.

NCLH is a single-segment cruise operator — 35 ships across Norwegian, Oceania and Regent Seven Seas, SIC 4400, no non-cruise revenue — so against the cruise-lines angle the whole business expresses the thesis. fuel is a principal cost: 11.7% of total cruise operating expense in Q3 2026 and 12.6% for the nine months, inside the brief's 10 to 15% band and above the 8% floor. the hedge book is what holds it below 1.0: 48% of 2026 and 42% of 2027 projected tonnage is hedged at $506 and $559 per ton versus a net-of-hedge price near $800, so only roughly 58% of 2027 fuel is spot-exposed and management guides a 10% fuel move to about $0.03 of quarterly eps. hedges are below market, so the exclusion for above-market books over half of ntm fuel does not apply. net leverage of 5.5x on $15.1b of debt adds a funding-cost channel if lower oil eases rates. tier 0.85 — pure cruise play, weighted down for the hedge book.

Royal Caribbean Group is a single-segment cruise operator — Royal Caribbean, Celebrity and Silversea plus a 50% stake in TUI Cruises — with roughly 70% of revenue from passenger tickets and the rest onboard; every dollar of revenue is a cruise vacation, so by business mix it is a pure expression of the cruise-line angle. the cost-side mechanism is real but partly muted: fuel ran $966m against $7.5bn of cruise operating expenses in 9m 2026 (about 13% of cash operating cost, about 9% including marketing, G&A and D&A), and bunker net of hedges was $778/mt in Q3. swaps cover 58% of 2026 and 53% of 2027 consumption at roughly $405 to $471/mt, so only about half of next-twelve-month burn is exposed to spot; the strikes are far below market, so the book is not an exclusion, but capture of a falling bunker price is roughly halved versus an unhedged peer. pure cruise business, hedge book weighted down → 0.8.

United Airlines Holdings is a single-segment US network passenger carrier (SIC 4512, scheduled air transportation) with a long-haul and trans-Pacific skew; essentially all revenue is flying. in the Q3 2026 10-Q aircraft fuel was $4,843m of $16,429m total operating expense, about 29 percent, the largest variable line and at the top of the thesis range. US majors including United abandoned fuel hedging roughly a decade ago, so spot jet fuel flows to cost within weeks and a Hormuz-driven crack and crude unwind passes through almost in full. that is the leg 1 direct mechanism with nothing else in the business diluting it → 1.0 pure play for the airlines angle. one offset: management says it recaptured 72 percent of the 2026 fuel increase through fares and expects 100 percent with a lag, so part of the cost relief will be competed back over the following quarters, but the lag runs in United's favour on the way down just as it ran against it on the way up.

Frontier Group Holdings is a single-segment US ultra-low-cost passenger airline (120 Airbus narrowbodies, mostly domestic). the thesis is the whole business: jet fuel was 24% of total operating costs in fy2025 and 28% in fy2024, the company held no fuel cash flow hedges at year-end 2025, and the Hormuz closure has pushed its fuel bill from $234m to $425m year on year in q3 2026 at $3.96 per gallon, with q4 guidance assuming $4.75. an unhedged carrier whose largest variable cost is spot jet fuel is the direct leg-1 mechanism with near-complete pass-through to cost, so purity 1.0 against the airlines angle. the offsets are not purity but sign strength — ulcc fares reset quickly in leisure markets, and the balance sheet is stressed (relief package request, repeated quarterly losses), so the margin recapture window may be short even as the cost relief is large.