Royal Caribbean Group ($RCL) Stock Hub 2026: A 37.9% EBITDA Margin, Guidance Cut in April and Raised in July, and the Mexican Permit That Was Denied

01 What The Second Quarter Actually Showed

Royal Caribbean reported the three months to 30 June 2026 on 28 July 2026, filing the 8-K and the 10-Q the same day. The headline on the release was "Royal Caribbean Group reports second quarter results above expectations and raises full year guidance", and both halves of that sentence are accurate. What the headline does not say is that earnings per share went down.

Revenue was $4.832 billion, up 6.5% from $4.538 billion. Passenger ticket revenue rose 4.5% to $3.344 billion; onboard and other revenue rose 11.1% to $1.488 billion, taking the onboard share of the mix from 29.5% to 30.8%. As at Carnival, the onboard line is growing at more than twice the rate of the ticket, and it is the higher-margin half.

Operating income was $1.307 billion, down 1.7%, for a margin of 27.0% against 29.3%. Adjusted EBITDA was $1.830 billion against $1.851 billion, and the adjusted EBITDA margin fell 290 basis points to 37.9%. Net income attributable to the group was $1.128 billion, down 6.8%, and diluted earnings per share were $4.20 against $4.41. Adjusted diluted earnings per share were $4.21 against $4.38, down 3.9%. The only adjustment in the quarter was $2 million of Silversea intangible amortisation.

Below that, interest expense net of capitalised interest rose from $228 million to $236 million and interest income fell from $12 million to $5 million. The tax provision was $14 million on $1.150 billion of pre-tax income, an effective rate of about 1.2%.

Volumes were strong. The group carried 2,399,066 guests, up 6.4%, on 13,572,396 available passenger cruise days, up 4.9%, at a load factor of 110.2% against 110.3%. Net yields per APCD were $288.95, up 1.9% as reported and 1.2% in constant currency, which the company said "exceeded the company’s guidance primarily driven by better than expected close-in demand".

02 Executive Summary

Royal Caribbean Cruises Ltd. is incorporated in Liberia, headquartered in Miami, listed on the New York Stock Exchange and a member of the S&P 500. It trades under the commercial name Royal Caribbean Group. Unlike Carnival, nothing about its corporate structure changed in 2026: no redomiciliation, no name change, no ticker change, no split. The SEC former-names field is empty.

The brands

Three wholly owned: Royal Caribbean International (29 ships, about 111,000 berths, contemporary and the volume engine), Celebrity Cruises (15 ships, about 38,900 berths, premium) and Silversea (12 ships, about 5,500 berths, ultra-luxury and expedition). Plus a 50% stake in TUI Cruises GmbH, which runs Mein Schiff and Hapag-Lloyd Cruises for the German market and is equity accounted; the carrying value was $990 million at the end of 2025 and it paid Royal Caribbean $258 million of dividends in 2025. Neither partner may fall below 37.55% until May 2033. Combined, 71 ships were in service at 30 June 2026.

The financial position

Total debt of $23.407 billion at a weighted average 4.66%, of which $2.762 billion floating, against cash of $875 million and $6.0 billion of undrawn revolving capacity for total stated liquidity of $6.9 billion. In July the accordion was exercised to lift revolver capacity by $250 million to $6.6 billion. Investment grade at all three agencies since the first half of 2025. Net debt to trailing adjusted EBITDA works out at roughly 3.1x, though the company does not publish the ratio.

The capital return

The quarterly dividend went from $1.00 to $1.50 in February 2026, a 50% increase, and $674 million was paid in the first half against $348 million a year earlier. A $2.0 billion buyback authorised in December 2025 has $805 million left after $1.035 billion of repurchases in the first half. Total returned in the half: $1.709 billion, against first-half free cash flow of roughly $457 million. The difference was funded with debt, which rose $1.5 billion in six months.

The growth programme

Thirteen ships on order for 43,230 berths, plus a seventh Icon-class agreed in July and sixteen more river vessels. The aggregate cost of ships on order rose from $11.3 billion to $16.5 billion in six months, up 46%, with about $14.3 billion of committed financing covering roughly 80% of the ocean-going order book. Private destinations expand from three to eight by 2028, and Celebrity River Cruises launches in 2027. Capital expenditure this year is guided at approximately $4.7 billion.

03 The Guidance Round Trip

The most useful way to read Royal Caribbean’s 2026 is as a single number moving twice.

April was a cut of $0.60 at the midpoint. The company attributed it to "higher than anticipated fuel costs (based on current at-the-pump rates) and an impact on Middle Eastern itineraries of TUI Cruises from geopolitical events, as well as lower non-fuel costs and the benefit from recent share repurchases". Fuel alone was $0.62 per share of headwind. Bookings for high-yielding Mediterranean itineraries had moderated late in the first quarter, partly on higher air fares, airline capacity cuts and flight disruption, and bookings for West Coast of Mexico itineraries also moderated.

July was a raise of $0.50 at the midpoint, driven by "the stronger-than-expected second quarter performance and an improved outlook for the remainder of the year". Note where that leaves the year: the midpoint of $17.80 is still marginally below the $17.90 guided in January. The round trip has not quite closed.

Current guidance in full

Currency assumptions: sterling at 1.34, the Australian dollar at 0.70, the Canadian dollar at 0.71 and the euro at 1.14. Capacity growth is guided at 4% in 2027, 6% in 2028 and 7% in 2029. Royal Caribbean does not guide adjusted EBITDA, in either quarter of 2026.

The sensitivities

The Perfecta programme

The glossary in the second-quarter release defines it precisely: "the multi-year Adjusted EPS and ROIC goals we are seeking to achieve by end of 2027… targeting 20% compound annual growth rate in Adjusted EPS compared to 2024 and ROIC of 17% or higher by the end of 2027". Against a 2024 base of $11.80, 2025 came in at $15.64 and 2026 is guided to $17.73–$17.87, a two-year compound rate of 23%. Return on invested capital reached 18.0% in 2025, already above the 2027 target. At a 20% compound rate from 2024, the implied 2027 figure is roughly $20.40 of adjusted earnings per share. No successor programme has been announced.

One small inconsistency worth flagging: the body of the same release says "ROIC in the high teens by 2027" while the glossary says "17% or higher". Two formulations in one document.

04 Brands, Fleet And Where The Revenue Comes From

At 31 December 2025 the group operated 69 ships with about 179,720 berths; with Legend of the Seas and Mein Schiff Flow both delivered in June 2026, the 2026 fleet table totals 189,420 berths across 71 ships. Itineraries reach more than 1,000 destinations in over 120 countries on all seven continents. Loyalty membership exceeds 28 million, and a "Points Choice" programme launches in 2026 alongside the Royal ONE credit card. Headcount is about 108,000, of whom roughly 96,500 are shipboard and about 87% covered by collective agreements.

Revenue by itinerary

North America is 66.2% of itinerary revenue in the quarter and 71.1% in the half. Ticket revenue originating in the United States was 78%, up from 77% a year earlier — concentration on the American consumer is increasing, not decreasing. Europe grew 10.7% in the half while Asia and Pacific fell 1.2%, consistent with the "itinerary modifications in China" that the January guidance flagged as a 30 basis point headwind to full-year yields.

05 Unit Economics

Royal Caribbean measures per available passenger cruise day, APCD. It ran 13,572,396 of them in the quarter.

The company attributed the cost beat to "favorable timing of expenses", which is explicitly a phasing benefit rather than a structural saving. Third-quarter guidance has net cruise costs excluding fuel per APCD falling 1.7% to 1.2%, which is partly the other side of that timing.

Fuel and hedging

The group paid $839 per metric tonne net of hedging in the quarter and burned 422,000 tonnes for $355 million. Swap coverage as a percentage of projected consumption runs 58% in 2026, 53% in 2027, 29% in 2028 and 14% in 2029, at average portfolio costs of $474, $405, $424 and $451 a tonne respectively. At 30 June there was $41 million of net unrealised gains on fuel hedges expected to reach the income statement within twelve months, against a $66 million loss position at the end of 2025.

Customer deposits

Customer deposits were $6.736 billion at 30 June against $6.379 billion a year earlier, up 5.6%, and $5.739 billion at the year end. The deposit build in the half was $996 million against $883 million. One caveat: deposits grew 5.6% while capacity grew 4.9% in the quarter and is guided up 6.6% for the year. On a per-berth basis the growth is close to nil, which is a materially less impressive picture than the headline dollar increase.

06 Balance Sheet, Ratings And The Return Of Capital

Total debt was $23.407 billion at face, $22.836 billion net of $571 million of unamortised issuance costs, of which $1.573 billion current. The weighted average rate is 4.66%. The fixed-rate book is $20.486 billion — $12.041 billion of unsecured senior notes at 5.52% maturing 2027 to 2038, and $8.445 billion of unsecured term loans at 3.33%. Floating-rate debt is $2.762 billion, including $300 million drawn on the revolvers.

Contractual future interest adds $564 million in the rest of 2026, then $1,049 million, $872 million, $769 million and $723 million, and $2,606 million thereafter — $6,583 million in total. Obligations falling due by 30 June 2027 are $1.6 billion of principal, $1.1 billion of interest and $0.8 billion of ship progress payments.

Recent financing

February 2026 brought $2.5 billion in two tranches, 4.750% due 2033 and 5.250% due 2038, used to refinance 2026 maturities. June 2026 brought a $1.9 billion twelve-year term loan for the delivery of Legend of the Seas, 95% guaranteed by Finnvera, with a fixed portion at 3.41%. And on 6 August 2026 the group priced $1.25 billion of 5.550% senior notes due 20 January 2034 at 99.837%, a spread of 105 basis points over the 2033 Treasury, for net proceeds of $1,240,150,000, with closing on 20 August 2026. The stated use of proceeds is partial repayment of floating-rate term loans and refinancing of other existing debt.

The export credit financing is the cheap money. The 2026 shipbuilding agreements price at Term SOFR plus 0.80% to 0.83% with 95% sovereign guarantees over twelve years post-delivery, against 5.52% on the unsecured notes. That is why roughly 80% of the ocean-going order book is financed that way — and why the river order book, which has no export credit cover, is a different proposition.

Ratings

S&P Global upgraded the unsecured rating from BB+ to BBB− on 4 February 2025 and revised the outlook to positive in October 2025. Moody’s moved from Ba1 to Baa3 during the second quarter of 2025. Fitch upgraded to BBB with a stable outlook in the third quarter of 2025. The annual report states plainly that the group "achieved investment-grade ratings across all three major credit rating agencies". One practical consequence: in January 2026 the collateral posting requirements were removed from six interest rate derivative hedges, which had been triggered by a fall below BBB−/Baa3.

Covenants

The 10-Q says the revolvers, most term loans and certain credit card processing agreements "contain covenants that require us, among other things, to maintain a fixed charge coverage ratio, and limit our net debt-to-capital ratio", and that the group was in compliance at 30 June and expects to remain so for twelve months. No numerical thresholds are disclosed anywhere, in the 10-Q or the annual report. In July 2024 the minimum stockholders’ equity requirement was removed from all export credit facilities. Change of control provisions can be triggered by an acquisition of more than 50% of the shares, or by a majority board turnover within 24 months; the public notes require a downgrade as well, and the new 2034 notes carry a 101% repurchase right.

Dividend, buyback and the funding gap

The dividend went $0.75, $0.75, $1.00, $1.00, then $1.50 in both the first and second quarters of 2026, a 50% step up declared in February. The annualised run rate is $6.00. The third-quarter dividend had not been declared as of 20 August 2026; the historical pattern points to early or mid-September. Buybacks: a $1.0 billion programme completed in November 2025, then a $2.0 billion authorisation from December 2025, of which $1.035 billion was executed in the first half of 2026 ($836 million in the first quarter, $199 million in the second), leaving $805 million. Shares outstanding fell from 270.5 million in February to 267.5 million in July, down 1.1%.

07 The Order Book And The Private Destinations

Thirteen ships, 43,230 berths. A seventh Icon-class became effective in July 2026 and is referred to in the text of note 8 but does not yet appear in the order book table at 30 June. Sixteen further river vessels are committed beyond the four in the table, taking the target river fleet to twenty.

The economics moved sharply in six months. Aggregate cost of ships on order excluding the partner brands went from $11.3 billion at 31 December 2025 to $16.5 billion at 30 June 2026, a 46% increase. Deposits paid are $1.3 billion. Euro exposure is 52.6% of the aggregate cost. Committed financing is approximately $14.3 billion, covering around 80% of the cost — and, in the company’s own words, that figure "excludes ships on order for Celebrity River Cruises".

Ships delivered in 2025 and 2026

Star of the Seas, the second Icon, was delivered from Turku on 10 July 2025 with 5,600 berths, financed with a $1.6 billion Finnvera-backed term loan. Celebrity Xcel, the fifth Edge, was delivered from Saint-Nazaire in October 2025 with 3,250 berths and financed with 5.375% notes due 2036 rather than the export credit facility, because the notes were cheaper. Legend of the Seas, the third Icon, was delivered in June 2026 and entered service on 4 July on seven-night western Mediterranean itineraries from Barcelona and Rome, moving to Fort Lauderdale from November 2026; it carries a $1.9 billion term loan. TUI Cruises took delivery of Mein Schiff Flow in June 2026.

The private destinations

The stated plan, verbatim from the second-quarter release: the group "is expanding its portfolio of private destinations from three to eight by 2028 through its Perfect Day and Royal Beach Club collections, and the company will enter river cruising in 2027 with Celebrity River Cruises". The three existing are Perfect Day at CocoCay in the Bahamas, which cost $250 million in its 2019 transformation and added the adults-only Hideaway Beach in January 2024; Labadee in Haiti, held on lease; and, since 23 December 2025, Royal Beach Club Paradise Island in Nassau, seventeen acres with an average design capacity of about 2,000 guests a day, structured as a public-private partnership in which Bahamians "will be invited to own up to 49% equity".

The five to come: Royal Beach Club Santorini (announced for summer 2026 and described as a recent launch in the first-quarter release), Royal Beach Club Cozumel (late 2026), Perfect Day Mexico at Mahahual on the Costa Maya (autumn 2027, and see the risk section), Royal Beach Club Lelepa in Vanuatu (October 2027 per a March 2026 announcement, after several date changes) and Silversea’s land-based The Cormorant at 55 South in Puerto Williams, Chile, a 150-room hotel opened in January 2026.

08 How Royal Caribbean Compares With Carnival And Norwegian

Carnival’s fiscal year ends 30 November, so its second quarter closed on 31 May, a month before Royal Caribbean’s and Norwegian’s. Carnival measures per ALBD, Royal Caribbean per APCD, Norwegian per Capacity Day, and the three definitions of adjusted EBITDA are not identical. Percentage changes compare reasonably; absolute per-unit levels do not.

Four things the table says

Royal Caribbean owns the margin and the occupancy. A 37.9% adjusted EBITDA margin against 23.7% and 25.2%, and a load factor six points above Carnival and nearly eight above Norwegian. On profitability per berth there is no contest.

But Carnival beat it on both operating levers this quarter. Carnival grew constant-currency yields 2.2% against Royal Caribbean’s 1.2%, and held unit costs ex fuel flat while Royal Caribbean’s rose 3.9%. That is the first recent quarter in which the operating gap moved in Carnival’s favour on both measures at once.

Leverage has converged. Both are at roughly 3.1x. The direction differs: Carnival improved more than half a turn in a year, while Royal Caribbean added $1.5 billion of debt in six months to fund ships and buybacks.

Norwegian is the divergent case, with yields down 2.6% in the quarter, full-year yields guided to roughly minus 5%, leverage of 5.3x, no dividend, no buyback and no quantified multi-year programme since the first quarter of 2026. It describes itself as being in the early stages of a turnaround.

09 What Actually Drives A Cruise Line’s Earnings

APCD and load factor

An available passenger cruise day is one lower berth available for one day. Load factor is passenger cruise days divided by APCD, and it exceeds 100% because third and fourth guests share cabins built around two berths. Royal Caribbean’s 110.2% means roughly one berth in ten is carrying an additional occupant — the structural advantage of a fleet weighted towards large family ships.

Net yields versus gross margin yields

Gross margin yields start from GAAP gross margin. Net yields are the non-GAAP measure that adds back payroll, food, fuel and depreciation. Both are per APCD. The company guides on and is judged by the second one, which is why a quarter can produce a 5.6% decline in one yield measure and a 1.9% increase in the other. Knowing which is being quoted is not a technicality.

Net cruise costs excluding fuel per APCD

The running cost of the ship per berth per day, with fuel removed. This is the discipline measure. Royal Caribbean’s rose 3.9% in constant currency this quarter, the highest of the three operators, and the company’s explanation for the beat against its own guidance — "favorable timing of expenses" — means some of that cost is deferred rather than avoided.

Customer deposits and the booking curve

Guests pay long before they sail, so the balance sheet carries a large deposit liability and the business runs on negative working capital. The deposit balance is the closest thing the sector has to a forward indicator, but it must always be read against capacity growth: a 5.6% increase in deposits on 6.6% capacity growth is not the same signal as a 5.6% increase on flat capacity.

10 Risks And Red Flags

Perfect Day Mexico and the silence since May

This is the most concrete unresolved item on the page. On 20 May 2026 Royal Caribbean furnished an 8-K responding to public statements by the head of Mexico’s environment ministry, SEMARNAT, on 19 May "indicating that SEMARNAT will deny approval of the Company’s initial application for the environmental permits needed to develop the Company’s Perfect Day Mexico project". The company said it "respects the role of SEMARNAT" and would "re-engage stakeholders" over the coming weeks.

What has happened since, in the public record: nothing. No 8-K, no press release, and no mention of Perfect Day Mexico or SEMARNAT in either the second-quarter results release or the 10-Q, both filed on 28 July. The same release repeats the expansion "from three to eight by 2028" without qualification. Against that silence sit $294 million already paid for the land and the port, plus $137 million of deferred tax liabilities generated by the acquisition, and a project that anchors the deployment plan out of Texas and Florida. Trade press has reported a figure of over a billion dollars all-in and 33 unmitigated environmental impacts identified by the Mexican review body, but those are sector-press reports and not primary sources; we are not treating them as verified.

Costs, and payroll in particular

Payroll and related rose 23.1% year on year against 4.9% capacity growth. Nothing in the release explains it. Net cruise costs excluding fuel per APCD rose 3.9% in constant currency, the worst of the three operators, and the guidance beat was explicitly attributed to timing.

Fuel exposure opens up after 2027

Hedge coverage falls from 58% this year to 29% in 2028 and 14% in 2029, at rising strikes. Those are the years of peak ship payments. Fuel already rose from 6.1% to 7.3% of revenue this quarter and was the main cause of the April guidance cut, at $0.62 per share.

Emissions regulation is now fully phased in

The EU Emissions Trading System reaches 100% coverage of European emissions in 2026, from 70% in 2025 and 40% in 2024. The company says that based on current deployment and current allowance prices it does not expect a material 2026 impact — which makes the allowance price the variable. The UK scheme entered force on 1 July 2026. FuelEU Maritime requires a 2% cut in fuel greenhouse gas intensity from 2025, tightening to 80% by 2050, with shore power obligations at TEN-T ports by 2030 and all EU ports by 2035; the annual report says the Fit for 55 package "could individually and collectively have a material adverse effect". The IMO is reviewing the Carbon Intensity Indicator through 2026 with a final determination expected in 2028, and is considering a fuel levy or carbon tax. Two new emission control areas, the Norwegian Sea and the Canadian Arctic, came into force in March 2026, and the Mediterranean joined in May 2025. More than 70% of the fleet has advanced emissions purification and most ships on order are LNG.

Geopolitics, twice

Mediterranean and West Coast of Mexico bookings moderated in the first quarter; the second quarter still carried a "modest, near-term impact on bookings for select itineraries, primarily due to prolonged geopolitical activity". The joint venture took the visible hit: equity investment income fell 37.4%, and management had already attributed that to TUI’s Middle Eastern itineraries. China itinerary modifications cost 30 basis points of full-year yield.

Concentration

There is no dedicated Caribbean concentration risk factor in the annual report, but the numbers are what they are: 66.2% of itinerary revenue from North America in the quarter, 71.1% in the half, 78% of ticket revenue originating in the United States and rising, and five of the eight private destinations in the Caribbean, Bahamas or Mexico basin. The nearest risk factor is about anti-tourism sentiment and proposed limits on cruise ships and passengers at popular ports.

Havana Docks

The same Helms-Burton Title III litigation that affects Carnival. Judgment of about $112 million was entered against Royal Caribbean in December 2022 and the company provided about $130 million. The Eleventh Circuit reversed in October 2024 and about $124 million of the provision was released. The Supreme Court granted certiorari on 3 October 2025 and, on 21 May 2026, vacated the Eleventh Circuit ruling and remanded for consideration of unresolved defences. The 10-Q says the outcome "is inherently unpredictable" and gives no assurance of a favourable result. No provision appears to have been reinstated at 30 June 2026. Theoretical exposure is roughly $112 million plus post-judgment interest, with treble damages sought.

Execution on a much bigger order book

The order book cost rose 46% in six months, 52.6% of it exposed to the euro, across four yards in four countries. The river business is a new operating model for the group with the first delivery in the second quarter of 2027 and no export credit financing. And PortMiami Terminal G, on completion, raises minimum lease payments to about $55 million a year with 3% annual escalators.

11 Management And Governance

Jason Liberty, 50, has been chief executive since January 2022 and added the chairmanship in November 2025, combining the two roles. Naftali Holtz, 48, has been chief financial officer since January 2022, having joined in 2019 from Goldman Sachs where he ran lodging and leisure investment banking. Richard Fain, chairman and chief executive from 1988 to 2022 and chairman until November 2025, remains on the board he joined in 1981. John F. Brock is lead independent director. The board has thirteen members, twelve of them independent.

There were no changes to the chief executive or chief financial officer in 2026. Two directors were added: Christopher Wiernicki, former chairman and chief executive of the American Bureau of Shipping, on 10 February 2026, and Tara Bunch, formerly global head of operations at Airbnb and before that at Apple and Hewlett-Packard, on 16 July 2026.

On capital allocation there is no formal published policy with numerical targets. What the company does is consistent: fund the ships first, mostly with sovereign-guaranteed export credit at SOFR plus 80 basis points; protect the investment grade rating, with the August 2026 notes explicitly earmarked to repay floating-rate term loans; and raise the shareholder return steadily, from a $0.40 quarterly dividend in 2024 to $1.50 in 2026 and from a $1.0 billion buyback to a $2.0 billion one. The discipline mechanism is the Perfecta return on invested capital target, already exceeded at 18.0% in 2025. The annual report is careful to state that there is no assurance dividends or buybacks continue at historical levels.

12 Tax: Section 883, UK Tonnage Tax And A 1.2% Rate

Royal Caribbean paid a $14 million tax provision on $1.150 billion of pre-tax income in the quarter. That is an effective rate of roughly 1.2%, and it is not an anomaly. Understanding why is essential to understanding the equity.

The company holds an opinion from United States tax counsel that its income, to the extent derived from or incidental to the international operation of ships, is excluded from gross income under Section 883 of the Internal Revenue Code. The annual report is explicit about the fragility: "Our ability to rely on Section 883 could be challenged or could change in the future. The provisions of the Internal Revenue Code, including Section 883, are subject to legislative change at any time." Without it, the subsidiaries would face branch profits tax, taxation of interest, and a 4% special tax on United States source gross transportation income. Alaska already applies a 33% tax to adjusted income from onboard gambling in Alaskan waters.

Two other pillars: from 2026 onwards "substantially all of our ships will be operated by companies that are within the United Kingdom tonnage tax regime" — sixteen ships were in it in 2025 — and the OECD 15% global minimum tax applies to the majority of earnings from 2026, which the company does not expect to be material because of the international shipping income exclusion. Liberia, the place of incorporation, has announced no Pillar Two changes to its own corporate tax.

13 Scenarios

Descriptive framings of what the published numbers imply under different conditions. Not forecasts, not recommendations.

The base case

The company’s guidance: $6.26 to $6.36 in the third quarter, $17.73 to $17.87 for the year, on roughly flat third-quarter yields, 6.6% capacity growth and $1,338 million of fuel. The largest single sensitivity is yield at $156 million per point for the year, more than three times the fuel sensitivity — the opposite balance to Carnival, and a direct consequence of hedging.

14 Bottom Line

Royal Caribbean is the highest-quality operator in the sector by almost every operating measure that matters: the best margin by more than 1,200 basis points, the highest occupancy, investment grade at all three agencies, a return on invested capital that hit its 2027 target two years early, and a cost of ship finance its competitors cannot beat. None of that is in question.

What this quarter added was a reminder that quality is not the same as immunity. Revenue grew 6.5% and earnings per share fell. The margin gave back 290 basis points. The most expensive cost line, payroll, rose more than four times faster than capacity with no explanation offered. The company beat its own cost guidance on timing rather than saving. And the guidance round trip — down $0.60 in April, up $0.50 in July, still a shade below where January started — describes a year in which the external environment took something away and operating performance clawed most of it back.

The two open questions are different in kind. The first is arithmetic: hedge coverage collapses after 2027 into the years of peak capital spending, and the company’s own sensitivity table shows how little of the fuel risk it currently carries. The second is not arithmetic at all. A regulator in Mexico said in May that it would refuse permits for a project on land that cost $294 million, and three months later the company has said nothing further about it while continuing to publish a destination target that depends on it. Silence is not evidence of a problem. But on a page where every other number is disclosed to two decimal places, it is conspicuous.

15 What To Watch Every Quarter

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