Airline shares rise as travel demand increases, reaching new post-COVID-19 heights

Airline shares were broadly higher on Tuesday, stimulated by a continuing rebound in demand from travelers for fresh post-COVID-19 highs and notable analyst remarks that stimulate investor interest.

The US Global Jets exchanged trade found JETS,
+ 1.03%
rose 3% to a nearly two-month high in morning trading. The ETF is on course for a seventh straight gain – it has increased 13% in the past six sessions – which would be the longest such stretch since the eight-day stretch ended March 13, 2018.

Among the most active US stocks of the ETF are shares of American Airlines Group Inc. AAL,
rose 1.9%, United Airlines Holdings Inc. UAL,
rose 1.4% and Delta Air Lines Inc. DAL,
+ 1.02%
advanced 2.1%.

A MarketWatch analysis of data provided by the Transportation Security Administration, part of the Homeland Security department, revealed that demand for travel has recovered from its rising trend, following a two-week dip in July.

The daily average of travelers ending weeks through TSA checkpoints went up to 699,675 last week, the highest daily average since the week of March 22nd.

“People are probably looking to push travel back to school in advance because spike cases delay mid-July travel plans,” Becker wrote in a note to clients.

Daily, the number of travelers passing through TSA checkpoints on Sunday increased to 831,789 from 683,212 on Saturday, and from 799,861 the previous Sunday, to the highest total since March 17.

On Monday, there were 761,861 travelers passing through TSA checkpoints, the highest total for a Monday since March 16, which was the last day that there were more than 1 million travelers (1,257,823).

US Transportation Security Administration, MarketWatch

The increased demand for travel comes as Cowen analyst Helane Becker said that although new COVID-19 case counts and hospitalizations remain high, they recently began to truncate lower.

“We continue to believe that there is coronavirus fatigue, with some now seeking normal life,” Becker wrote. “We expect this TSA throughput trend to rise this week, likely in part helped by students returning to their schools.”

MESA from Mesa Air Group Inc.,
+ 6.30%
stock grew 5.4% after Deutsche Bank analyst Michael Linenberg increased its rating on the air carrier to buy hold, and raised its share price target to $ 5.50 from $ 4.00. The upgrade comes after Mesa Air reported a surprise second-quarter profit that emerged from a year ago, although revenue fell more than forecast.

Elsewhere shares of Southwest Airlines Co. LUV,
+ 0.85%
klom 2.8%, Spirit Airlines Inc. SAVE,
adjusted to 2%, JetBlue Airways Corp. JBLU,
+ 0.17%
got 2%, Alaska Air Group Inc. ALK,
was up 0.9% and Hawaiian Airlines parent Hawaiian Holdings Inc. HAVE GOT,
+ 0.87%
rose 3.7%.

It is unclear how news that Russia has registered the first vaccine to treat COVID-19, before even starting Phase 3 trials, affects aviation stocks, given the uncertainties surrounding the effectiveness and safety of the treatment.

Do not miss: Russia’s accelerated COVID-19 vaccine greeted with alarm, as experts say Phase 3 trial is essential.

The Jets ETF has now risen 35.6% over the past three months, but has so far lost 43%. In comparison, the Dow Jones Transportation is average DJT,
+ 0.22%
, which includes six aviation components, has risen 1.1% this year and the Dow Jones Industrial Average DJIA,
is 1.5% glide.