The coronavirus pandemic had taken a huge toll on the aviation industry, with market researchers expecting that the path to recovery would take a long time. Some believe it could take at least two years or more for the aviation industry to jump back to pre-COVID levels.
. UAL, Spirit Airlines, Inc. SAVE en American Airlines Group Inc. AAL, have so far this year more than 50% tanks. “Data-reactid =” 21 “> A handful of airlines have suspended their dividend payments and some have even filed for bankruptcy protection. Notable are shares of some of the major airlines, including United Airlines Holdings, Inc.. UAL, Spirit Airlines, Inc. SAVE en American Airlines Group Inc. AAL, have so far this year more than 50% thanks.
But fortunately, things started looking up for airlines of late. In fact, air shares plummeted on August 10 on warning signs that travel could eventually be lifted. The US Global Jets ETF grew 4.8% yesterday, with all of its U.S.-listed stocks gaining traction. Similarly, the NYSE Arca Airline Index was up nearly 5%, with investors appearing mostly to see the trend of travel demand as a solid reason to boost stocks.
The Transport Security Administration (TSA) reported that 831,789 passengers passed through the TSA checkpoints on Aug. 9, the highest one-day total since March 17.
Well, one-day data may not signal a trend, but the averages have also stood at a constant level, affecting nearly 700,000 daily commuters in the recent seven-day period, up from 661,000 three weeks ago. On August 8, TSA surveyed 683,212 people and on August 7, it screened 762,547 passengers at checkpoints nationwide.
Moreover, the latest TSA data showed a significant uptick in the demand for air travel. After all, at the lowest level, on April 14, only 87,534 travelers passed through the TSA checkpoints, 96% down from a year ago.
In fact, airline files are positioned to gain momentum as the latest case-count of coronavirus shows signs of a declining trend. Only 13 U.S. states reported that their average of seven days of new cases rose in the last two-week period, down from 42 states that had higher averages a month earlier.
And how can we forget that the prospects of another financial aid from Congress are good for the aviation industry? Possibility of a second airline bailout package strengthened after President Trump signaled support for an extension of the Payroll Support Program in the Cares Act. In fact, a group of 16 Republicans signed a letter last week supporting another incentive package.
That we do not forget, even though $ 50 billion is provided under the Cares Act for the airline industry, which has companies with abused bottom lines in the wake of the pandemic.
And last but not least, the travel agency got a boost after the State Department removed the warning for U.S. citizens traveling abroad.
3 Airline supplies to keep an eye on
The return of Americans to the skies last weekend and the supportive stance of the government have improved things for airline shares.
“data-reactid =” 45 “> So we’ve highlighted three best US carriers that not only merged on August 10th, but are also in pretty decent shape, these foundations currently have a Zacks Rank # 3 ( Hold) .You can see complete the full list of current Zacks # 1 Rank (Strong Buy).
American Airlines is widely expected to increase capacity due to increasing demand for air travel.
In addition, the company has taken several initiatives to reduce costs, which helped it lower its cash-burn rate. The company’s cash-burn rate in the June quarter was nearly $ 55 million per day, compared favorably with its previous forecast of $ 70 million per day. By the end of 2020, the carrier hopes to reduce its cash-burn rate to zero. The company’s shares gained 7.4% on August 10.
United Airlines provides air transportation services in North America. It transports people and freight via its main line and regional fleet.
United Airlines’ recent cost-cutting measures to offset coronavirus-related setbacks have been good for the company. The company took various cost-control measures such as securing rent (excluding key roles), delaying salary increases and giving employees the option to apply for voluntary leave or early retirement. The carrier is also trying to retain cash through cuts in capital and business expenses.
The company’s shares gained 9.4% on August 10th. Revenue growth for the past five-year period is 12.8%.
ALGT serves cheap passenger services. It focuses on connecting free travelers in small and medium-sized cities to world-class destinations. “Data-reactid =” 61 “>Allegiant travel company ALGT serves cheap passenger services. It focuses on linking holiday travelers in small and medium-sized cities to world-class destinations.
Prior to the outbreak of coronavirus, Allegiant Travel had an impressive record of dividend payments and share acquisitions. Most importantly, the company has modernized its fleet. Allegiant’s fleet size at the end of 2019 was 91, indicating an increase in the reported figure of 2018. The transition to an all-Airbus fleet, completed way back in November 2018, has improved Allegiant’s fuel efficiency.
The company’s shares rose 0.9% on August 10. The rate of income for growth over the past five years is 12%. What’s more, the expected rate of profit for the next five-year period is 20.9%.
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