Wednesday turned out to be a great day to hold airline stocks, with large carriers like Delta Airlines (NYSE: DAL) soar to close the day with near-double-digit percentage gains. At the end of the trade, Delta shares were up 9.5%.
Throughout the day, even airlines such as Alaska Air Group (NYSE: ALK) and Hawaiian Holdings (NASDAQ: HA), who initially looked like he was sitting on the rally, managed to get on board and find a seat. At the close, Alaska Air was up 9.2% and Hawaiian gained 10.9%.
Aircraft manufacturer Boeing (NYSE: BA) also highlight. Boeing stocks rose more than 5% at one point, closing the day with an increase of 4.4%.
Biotechnology is probably the main driver of today’s earnings for airline stocks. Modernthis is (NASDAQ: MRNA) announcement regarding its new mRNA-1273 coronavirus vaccine: The last analysis of phase 1 clinical trials conducted until March shows that 100% of the participants evaluated, on a range of dosages, ended up producing antibodies against the coronavirus.
Moderna’s announcement is seen as an early sign that it may soon be safe for people to travel again, especially by air. Such a revival of air transport would also boost demand for new Boeing aircraft.
Even before Moderna’s vaccine turns out to be safe and effective (phase 2 trials are underway, phase 3 trials to start in two weeks), the airline industry is working hard to get travelers back on planes . Today, Wall Street newspaper reported “major push to boost travelers’ confidence” whereby airlines claim planes safer be in buildings, due to the “rapid ventilation” of aircraft, “heavy filtering” and “constant infusion of fresh air” from the outside.
So far, people don’t seem to be buying these arguments. In his report on Delta’s results released on Tuesday, CEO Ed Bastian observed that passengers are not lining up for new flights as fast as his airline had hoped, and that Delta will slow the reintroduction of flights to match to the least hoped customer. request.
Delta also now predicts that air traffic in September will be only about 25% of what it was a year ago, and that it could take “more than two years before we see a lasting recovery” in travel air travel in general, while business travel (the most lucrative for airlines) may never be what it used to be.
It is a disturbing forecast. Fortunately for airline title owners, more people were listening to Moderna today.