With COVID Relief Funds Released in the US, Consumers Buy Air Tickets Instead of Airline Stocks

Consume in the Real Economy Instead of the Stock Market with Subsidies

(Source: WSJ, Angus Mordant/Bloomberg)

[Asia Economy Reporter Yujin Cho] As the U.S. government begins distributing COVID-19 relief funds, an analysis suggests that this money will flow into the real economy rather than the stock market.

The Wall Street Journal (WSJ) reported on the 18th (local time) that since the start of $1,400 cash payments per American under the $1.9 trillion stimulus package, inquiries about airline tickets have surged sharply. As lockdowns are lifted in major U.S. regions and vaccine distribution expands, outdoor activities have resumed, leading funds that had flooded into the stock market to shift toward the real economy, the Journal analyzed.

According to Google Trends, a search interest analysis service provided by Google, the search volume for 'airline tickets' hit an all-time high of 100. Google Trends indexes users' keyword search volumes, setting the highest search volume as 100 to track trends over time. The record-high interest in searching for airline tickets in the U.S. appears to be due to pent-up demand exploding in the travel and airline sectors, which were severely hit by the COVID-19 crisis. The search volume for airline tickets began to increase explosively starting on the 17th, when the U.S. Treasury announced it had distributed approximately $242.4 billion in relief funds to 9 million Americans.

The number of air passengers is also setting new records daily. According to the U.S. Transportation Security Administration (TSA), the number of airport passenger screenings in the U.S. reached 1.34 million as of the 14th. In early March last year, right after the World Health Organization (WHO) declared COVID-19 a pandemic, airport passenger numbers were about half compared to the same period the previous year, but on the 11th, daily passenger numbers exceeded 1 million, marking the highest level in a year.

Experts predict that pent-up consumer demand will increase even more significantly. As COVID-19 infection numbers decline, the expansion of vaccine distribution and the lifting of lockdown measures by state governments are accelerating economic reopening. Currently, five states?Montana, Iowa, North Dakota, Mississippi, and Texas?have recently lifted mask mandates. Bespoke Investment Group stated, "With vaccine distribution expanding and mask mandates being lifted one after another, Americans are starting to move again."

According to ARC, a company specializing in airline ticket transaction processing, the annual average payment amount for airline tickets was about $90 billion over six years before COVID-19 but dropped to $23 billion last year, less than one-third. As of the end of February this year, it was only $2.8 billion.

Chris Gaffney, Head of World Markets at the Teachers Insurance and Annuity Association of America (TIAA), said, "When disaster relief funds were provided last year, activities were restricted due to lockdowns, so there was no opportunity to spend, but this time is different," adding, "(The relief funds) are opening opportunities to spend on travel, entertainment, and leisure rather than stock accounts."

Movie theaters, theme parks, stadiums, and other venues that were directly hit by the COVID-19 crisis are also beginning to reopen. Disneyland in the U.S., which had been closed for a year due to COVID-19, will resume operations starting in April, and Universal Studios, Legoland, Knott's Berry Farm, Six Flags Magic Mountain, and others are expected to open one after another. Various outdoor sports venues, including Major League Baseball (MLB) stadiums, are reopening, and sports game attendance is expected to partially normalize soon.

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