Why Airline Shares Are Soaring Today
Wall Street is taking a glass-half-full approach on Wednesday, focusing on a continued easing of COVID-19 restrictions and a May jobs number that came in better than expected. There is evidence the economy is bouncing off of its lows, and that is good news for a range of sectors.
Airlines, among the companies hardest hit by the pandemic, are rallying on the hope for normalization. Shares of Spirit Airlines (NYSE: SAVE) soared 14% as of midday, while shares of United Airlines Holdings (NASDAQ: UAL), American Airlines Group (NASDAQ: AAL), Delta Air Lines (NYSE: DAL), Southwest Airlines (NYSE: LUV), and JetBlue Airways (NASDAQ: JBLU), and Alaska Air Group (NYSE: ALK) were all up more than 6% each.
Airlines have been forced to scramble for their survival due to the pandemic, with traffic falling to just a fraction of normal levels and revenue all but drying up. The sector is stable, thanks in part to funds provided by the CARES Act stimulus plan, but if traffic does not return in the months to come, the industry is going to face liquidity issues.
Source Fool.com
