Airline stocks soar on optimistic TSA traveler data, analyst says


Airlines stocks soared on Monday, as optimistic TSA data and analyst comments added to optimism that a recovery from the COVID-19 pandemic may have already started.
The recovery in the sector is accompanied by many stocks bouncing off multi-year lows and as part of a broader stock market surge.

Global Jets US Exchange Traded Fund
+ 11.58%

jumped 11.6% in the afternoon, 31 of the 33 components of the actions gaining ground. The rally comes after the ETF fell 12% last week to close Friday at the lowest price since its inception in April 2015.
Among the most active components of the ETF, the actions of American Airlines Group Inc.
+ 9.18%

jumped 9.2% after closing Friday at a record low; Delta Air Lines Inc.
+ 13.91%

rose 13.9%, after losing 15.5% last week in a 5-day losing streak, closing Friday at the lowest price since August 2018; and United Airlines Holdings Inc.
+ 21.13%

rose 21.1%, the largest one-day increase in two months, after falling 21.7% last week, ended Friday, with the lowest close since December 2012.

Meanwhile, the Dow Jones Transportation Average
+ 7.24%

, which includes the above three stocks and three other airline components, rose 7.2%, while the Dow Jones Industrial Average
+ 3.85%

powered 912 points, or 3.9%.

To help spark investor enthusiasm, the latest data from the Transportation Security Administration (TSA) showed that for the week ending Saturday, an average of 205,010 travelers a day passed through TSA checkpoints, according to MarketWatch analysis of TSA data. Although this number is down 91.5% from a year ago, it is the fourth consecutive week that the daily average has increased and the decline from year to year has decreased.
The TSA said the total travel throughput on Sunday was 253,807, which was the highest daily total since March 24.
Raymond James analyst Savanthi Syth said signs of “gradual improvements in demand” are coming as news from Warren Buffett’s Berkshire Hathaway Inc. sells all of its airline shares, CEO from Boeing Co., David Calhoun, predicts a major airline bankruptcy this year and the recent failure of United. the increase in debt “left investors in the sector feeling in ruins”. She interpreted all the news and negative feelings as “silver liners” for the stock outlook.
Do not miss: Airlines stocks plummet after Boeing CEO warns of possible industry bankruptcy.
Read also: Airlines stocks tumble after Warren Buffett quits the industry, Air Canada optimistic outlook.
Syth said data on business and leisure fares appear to have bottomed out in mid-March and appear to stabilize at slightly higher levels in April.
“The gradual improvement in prices has continued [the first half of] May with sequential improvement in levels of [the second half of] April, which is the tale of some semblance of return from demand, albeit from an extremely weak base, “Syth wrote in a note to clients. “A slight increase in fares regularly points to the peak summer travel season. “
See also: Airlines stocks break loss streak as JetBlue estimates demand has already bottomed out.
Among the other three Dow transportation airlines, shares of Southwest Airlines Co.
+ 13.49%

jumped 13.5%, JetBlue Airways Corp.
+ 8.98%

jumped 9.0% and Alaska Air Group Inc.
+ 13.34%

increased 13.3%. Southwest shares, which posted the largest one-day gain since March 13, closed Friday at the lowest level since April 2014.
Elsewhere, Spirit Airlines Inc.
+ 24.71%

up 24.8% after closing Friday at record lows, Hawaiian Holdings Inc., parent company of Hawaiian Airlines
+ 19.26%

19.3%, Mesa Air Group Inc.
+ 2.23%

gained 2.2% and SkyWest Inc.
+ 12.10%

advanced 12.1%.
Investors can expect more news on demand from the industry as representatives from several airlines are expected to make a presentation at the Wolfe Research World Conference on Transportation and Industries starting on Tuesday.


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