What happened
Shares of Boeing (NYSE: BA) are 4.9% large with entry of 02:35 hrs EDT on good news for the airline sector.
The U.S. Transportation Security Administration announced this morning that 831,789 passengers were passed by U.S. airport screeners on Sunday – nearly a tenfold increase from mid-April. Airline shares are bouncing following the good news, with my airline-spotting colleague Lou Whiteman reporting this morning that most major airlines are a solid 4% or more.
Image Source: Getty Images.
So what
Increased air travel should be good news for companies that also build and sell aircraft. Logically, the more people flying, the more need to buy new aircraft and provide service to transport all the people. So it is perhaps no surprise that we are also seeing shares of Boeing rise this afternoon.
Well what
Let’s not come for ourselves yet. Air traffic may have been up ten times one particular day, but that’s no guarantee that it’s facing coronavirus infections that have killed 5 million (roughly one in every 66 people) in the US over the weekend.
For that matter, even if Sunday’s figures to do hold on, 831,789 flyers is still barely 30% of the number of people who flew on planes a year ago. It will take more than 831,789 passengers a day to make the airline industry profitable again. It will take more than 831,789 passengers a day to make Boeing profitable again.
This recession is far from over.
