US Airline Stocks, Which Were Declining, Make a Big Leap... Will the Skyways Open?

(Source: WSJ, DIRK SHADD / ZUMA PRESS)

[Asia Economy Reporter Yujin Cho] The stock prices of major U.S. airlines have recently surged to more than double their levels before the COVID-19 pandemic. This has led to interpretations that the crisis in the skies triggered by COVID-19 has passed its worst phase and entered a recovery period. As the suppressed demand for air travel revives ahead of the summer peak season, airlines that had been in a state of suspended operation are growing optimistic about the expansion of pent-up demand.

On the 15th (local time), the stock prices of major U.S. airlines including Delta Air Lines, United Airlines, and American Airlines all closed higher. American Airlines’ stock price closed at $25.17, up 7.70% that day. This marks a more than twofold increase within a year since the World Health Organization (WHO) declared COVID-19 a pandemic in March last year.

On the same day, Delta Air Lines’ stock price rose 2.29% to $50.97, soaring 165.60% from its one-year low of $19.19, while United Airlines’ stock price jumped 8.26%, soaring 205%.

Liquidity in the stock market is flowing into the airline industry, which is a representative turnaround sector after COVID-19, reflecting growing expectations in advance. Doug Parker, CEO of American Airlines, described this as "the very clear start of a trend upward."

Airlines interpret this recent surge in stock prices as a signal that the airline market has entered a recovery phase. Ed Bastian, CEO of Delta Air Lines, said at an industry conference, "The number of air passenger bookings targeting the spring and summer travel seasons has started to increase significantly over the past 5 to 6 weeks."

As demand suppressed ahead of the peak season revives, airlines are also raising their expectations for a recovery in pent-up demand.

Recently, the U.S. Transportation Security Administration (TSA) reported that the number of airport passenger screenings in the U.S. reached 1.34 million. The daily number of airport passenger screenings exceeded 1 million on the 11th, marking the highest level in a year since WHO declared COVID-19 a pandemic.

In early March last year, the number was around 700,000 to 1 million, about half compared to the same period the previous year, but as the vaccination rollout continued to increase, expectations for the normalization of the airline market have grown.

On the other hand, health authorities say it is still premature to call this a "trend recovery." Since social distancing and travel restrictions have not yet been fully eased, some forecasts suggest it will take several years for the airline market to fully normalize.

The U.S. Centers for Disease Control and Prevention (CDC) warned that "the behavior of Americans in March and April this year will be a critical turning point to prevent another major COVID-19 outbreak," urging strict maintenance of travel restrictions.

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