高收益运输与航空行业：系好安全带指示灯亮起——将高收益运输行业评级定为低配

Fasten Seatbelt Light Is On -Initiate HY Transportation at UW It's been a smooth ride for HY Airlines since "Liberation Day."But, the makeup of the sector remains higher beta, and wethink this leaves it susceptible to consumer weakness andmacro volatility. UAL is our top OW, JBLU our top UW, AAWW acore MW, and AAL rated MW. Edward Brucker, CFA+1 212 526 4435edward.brucker@barclays.comBCI, US Abanikash Rayaji, CFA+1 212 526 9843abanikash.rayaji@barclays.comBCI, US Investment Overview Despite what seems to be a smooth ride right now, the airlines industry remains volatile andfully commoditized, with clear winners and losers. First movers that strengthened balancesheets post-COVID—like UAL—should stay resilient,offering~30bp upside versus IG peers likeDAL. Conversely, it could get bumpier for the more vulnerable cohort, who are facing mountingrisks; JetBlue 2031 Loyalty Bonds are our top Underweight, with bonds likely retracing to thelow $90s. •We initiate HY Transportation at Underweight.As the parent index of HY Airlines, the sectorcontinues to maintain large exposure to Airlines including JBLU and AAL, which could lead tosome underperformance given their overleveraged balance sheets and higher betacharacteristics. •The airlines industry is highly competitive and commoditized, with clear winners andlosers emerging post-COVID and going forward. •Winners, like UAL, have improved balance sheets and are expected to remain resilient even ifthe economy weakens. •The more vulnerable cohort, especially some low cost carriers (LCCs) and (ULCCs) (eg,JetBlue), face more risk due to overcapacity and higher costs. •Oversupply, especially from low-cost and leisure carriers, is a concern; capacityreductions are likely needed. •Legacy airlines (UAL, DAL) are better positioned for macro uncertaintythan in the past. •Airlines with strong loyalty programs and premiumofferingsare expected to outperform andthe late bloomers are behind the ball. Thisdocument is intended for institutional investors and is not subject to all of theindependence and disclosure standards applicable to debt research reports prepared for retailinvestors under U.S. FINRA Rule 2242. Barclays trades the securities covered in this report for itsown account and on a discretionary basis on behalf of certain clients. Such trading interestsmay be contrary to the recommendationsofferedin this report. Please see analyst certifications and important disclosures beginning on page 57.Completed: 03-Nov-25, 14:51 GMTReleased: 03-Nov-25, 15:30 GMTRestricted - External •Air cargo freighters have solid business models but less attractive valuations;we rate AAWWat Market Weight and viewtariffsell-offsas good opportunities. Sector Thoughts and Relative Value We initiate coverage on the HY Transportation sector at Underweight. The sector remains heavyin airlines, with the higher beta credits a very large portion. With the sector trading on top of itslong-term average with the HY Index, we think it is vulnerable due to the airline constituentswithin it. Source: Bloomberg HY Airlines Sector Commentary The High Yield Airlines index is unsurprisingly high beta. Historically, the index underperformsthe HY index when there are bouts of volatility and tightens through the HY index during periodsof strength. Given the significant economic sensitivity within the sector, this makes sense to us.The spreaddifferentialbetween HY Airlines and the HY Index is at its long-term average ofapproximately 40bp. With the market at the highs, risks including the worsening US labormarket and poor fiscal profiles1create some fragility within the sector. In this context and givenhigher beta is a large cohort of the index, we think spreads are poised to go wider. With our UWon JBLU 2031s, the sector could be 30bp wider under our assumption that the bonds could goback to the low $90s, The makeup of the index could keep it wider over time. UAL, one of the tightest names in thesector, could be a potential rising star candidate by 2026, which could take a tight trading nameout of the index. AAL, which is more highly levered and therefore more volatile, accounts for asignificant amount of the Airlines index (close to 40% ). AAL tends to underperform when themarket sellsoff,although the bonds have been trading relatively tighter more recently (near 5%yield). Similarly, JBLU loyalty bonds are 16% of the index. Given the size of the bond issue and10-11% yield levels, their underperformance could lead to underperformance of the index. The makeup of the sector has dramatically changed over the past few years. There have been anumber of exits from the index. Last year alone, Delta was upgraded to IG in July, and HawaiianAirlines was bought by Alaska in September, which took HA out of the index. SAVE went throughits first bankruptcy in November 2024 and its second August 2025, now with only the EETC 2028notes included. Lastly, UAL's secured debt was upgraded by Fitch to to IG. Relatedly, t