Airline earnings landed with turbulence this time, and for investors in aviation-focused ETFs, the contrast between American Airlines Group Inc (NASDAQ:AAL) and JetBlue Airways Corp (NASDAQ:JBLU) is bringing the growing differences within aviation ETFs in focus.
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American Airlines Group reported a fourth-quarter earnings miss but guided to a stronger-than-expected 2026, even after pricing in revenue headwinds from Winter Storm Fern and the U.S. government shutdown.
JetBlue posted better-than-expected revenue and operational improvements, yet deeper losses and rising costs sent its shares lower.
For airline-heavy funds such as the U.S. Global Jets ETF (NYSE:JETS), which holds both legacy and low-cost carriers, the mixed results underscore the growing dispersion within airline portfolios. The fund dropped 1.48% on Tuesday at the time of publication.
American Airlines' outlook suggests weather-related disruptions may be more material and more recurring than consensus estimates imply. Management guided to a first-quarter loss that includes a $150 million to $200 million revenue hit from Winter Storm Fern, while still projecting 7% to 10% revenue growth.
For airline ETFs and broader transport funds such as the iShares Transportation Average ETF (BATS:IYT), the guidance raises questions about whether climate-driven volatility is still being treated as episodic rather than structural.
At the same time, American Airlines struck an optimistic tone on longer-term fundamentals, pointing to accelerating demand for premium travel, fleet upgrades, and a shift toward higher-yield seating. Premium seat growth is expected to outpace non-premium offerings for the rest of the decade, with lie-flat seats projected to rise more than 50% by 2030.
That dynamic matters for diversified travel funds such as the SPDR S&P Transportation ETF (NYSE:XTN) and even leisure-linked vehicles like the Invesco Dynamic Leisure and Entertainment ETF (NYSE:PEJ), where revenue mix can boost performance.
JetBlue's results paint a different picture. While its JetForward strategy delivered $305 million in incremental EBIT in 2025 and operational reliability improved for a second straight year, the airline remains weighed down by rising unit costs and leverage. Losses widened despite stable demand and stronger loyalty and ancillary revenue, highlighting the challenges faced by lower-cost and turnaround carriers inside airline ETFs.
Taken together, the earnings reinforce that airline ETFs are no longer simple recovery trades. Instead, they reflect a widening gap between carriers with pricing power and premium exposure and those still battling cost inflation.
For investors using airline and transportation ETFs as macro plays, the sector is caught between near-term turbulence and long-term optimism. This makes carrier mix an increasingly critical factor, rather than headline travel demand.
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