Why Airline Shares Are Rallying Higher Again Today
A wave of euphoria is sweeping through the airline sector as investors react to some positive signs suggesting a recovery is at hand.
Shares of American Airlines Group (NASDAQ: AAL) led the sector higher for the second straight day, up more than 20% at 11 a.m. EDT, but the rally was widespread. Shares of United Airlines Holdings (NASDAQ: UAL), Spirit Airlines (NYSE: SAVE), and JetBlue Airways (NASDAQ: JBLU) were up double-digits, and Delta Air Lines (NYSE: DAL), Southwest Airlines (NYSE: LUV), Hawaiian Holdings (NASDAQ: HA), Alaska Air Group (NYSE: ALK), and Allegiant Travel (NASDAQ: ALGT) gained more than 4% apiece.
Airline stocks were hit hard by the COVID-19 pandemic, with travel demand falling more than 90% and revenue all but evaporating. The airlines responded by raising liquidity, in part thanks to the CARES Act government stimulus plan, but unless demand for travel returns, the carriers are going to eventually face liquidity issues.
Source Fool.com
