Even before the jet fuel crisis that already led to thousands of flight cuts and dealt the final blow to Spirit Airlines, aviation has never been a particularly lucrative industry due to the prohibitive costs of both launching and staying in business.
Since the start of 2026, the shares of the “big three” airlines, United and American Airlines, have fallen by about 5%
While Delta and JetBlue’s stock prices are trading significantly higher, almost every carrier, both in the U.S. and globally, is feeling pressure from high jet fuel costs and a broader economic and political landscape of uncertainty. As a result, this week, investment giant Morgan Stanley issued a series of updates to its guidance for several European airlines, including downgrading German flag carrier Lufthansa to Underweight on May 26. Morgan Stanley also lowered the airline’s price target from €7.30 to €6.20 just a month after bringing it down from Overweight on April 1.
Morgan Stanley resets recommendation and price target for Air France-KLM In a separate note to clients, Morgan Stanley raised its recommendation for Air France-KLM from Market-Weight to Overweight and increased its price target to €11.50 from €9.40 The investment firm cited the airline conglomerate’s recent earnings call and cost-capacity cuts as reasons for its potential profit growth. It also called out the stock’s “cheap” valuation compared to other European peers, including Lufthansa in particular. The latest moves put Morgan Stanley firmly in the “bullish” camp when it comes to the airline holding company that combined the national carriers of France and The Netherlands through a 2004 merger.