Will It Soar Again... Airline Stocks Surge on COVID-19 Vaccine News

Pent-up Travel Demand Expected to Revive
Individual Investors Who Accumulated Airline Stocks Realize Gains on the 19th as Prices Rise

[Asia Economy Reporter Oh Ju-yeon] As expectations for the development of Moderna's COVID-19 vaccine rise, airline stocks are gearing up for takeoff. This is interpreted as a reflection of the view that travel demand, which had been severely suppressed due to COVID-19, could revive once a vaccine is developed.

According to the Korea Exchange on the 20th, Korean Air closed at 19,500 KRW, up 8.03% from the previous trading day. Korean Air's stock price, which was in the 27,000 KRW range earlier this year, was halved to 12,800 KRW due to the COVID-19 crisis and struggled even during the stock market rebound. The stock price, which showed signs of a slight rebound, turned bearish again this month, recording a -5.50% return in May. Considering that the KOSPI index rose by 4.50% during the same period, this was a significant underperformance.

The rise in the domestic stock market this month was not due to a fundamental solution to the COVID-19 crisis but rather supported by government stimulus measures and individual companies' earnings, factors that did not directly affect airline stocks. Rather, the sharp rise in airline stocks following the vaccine news confirmed that they could immediately benefit once a COVID-19 treatment is developed. Asiana Airlines rose as much as 15.78% intraday on the 19th. T'way Air also rose as much as 13.99% intraday before closing up 9.04%, while Air Busan (4.35%) and Jin Air (9.73%) also saw significant gains.

Most individual investors who had been buying airline stocks this month realized their profits. In the case of Korean Air, the volume worth 21.586 billion KRW that individuals had net purchased from the 4th to the 18th was all sold out on the 19th. Individuals net sold 21.76 billion KRW worth of shares in just one day.

Individuals also bought Jin Air shares worth 1.844 billion KRW during the same period and sold 1.791 billion KRW worth on the 19th, making a profit. During this period, Jin Air's stock price ranged between 9,660 KRW and 10,450 KRW before rising to 10,600 KRW on the 19th. The average selling price by individuals on that day was estimated at 10,755 KRW.

Yang Ji-hwan, a researcher at Daishin Securities, analyzed, "The current downturn in the airline industry was caused by the sudden disappearance of air passenger demand due to COVID-19, not by intensified competition. In the first quarter, although there was a decrease in demand due to COVID-19, the drop in airfares was not as large as the market expected. We need to observe the situation from the second quarter onward."

This content was produced with the assistance of AI translation services.