U.S. airline stocks hit highest prices since June on travel uptick, bailout hopes

A JetBlue Airways Corp. plane taxis next to American Airlines Group Inc., Delta Air Lines Inc., and Alaska Airlines Inc. aircraft at Reagan National Airport (DCA) in Arlington, Virginia, U.S., on Monday, April 6, 2020.

Andrew Harrer | Bloomberg | Getty Images

U.S. airline stocks Tuesday headed toward their highest prices since mid-June as more customers return to air travel and hopes for more government coronavirus stimulus grow, boosting one of industries hit hardest by the pandemic.

Delta Air Lines shares were up more than 4% in afternoon trading while United Airlines rose 2%, each touching their highest prices since June 19. American Airlines jumped 2.5%, hitting its highest share price since June 22. Southwest Airlines rose 2.9% to its highest price since June 16. The broader S&P 500 also moved higher, nearing a record high

Airline shares have had a strong start to the week after federal data showed more people passing through U.S. airports. On Sunday alone, the Transportation Security Administration screened 831,789 people, the most since March 17.

“We continue to believe there is coronavirus fatigue with some now looking to get back to normal life,” wrote Cowen airline analyst Helane Becker on Tuesday. “We expect to see TSA throughput trend higher this week probably helped in part by college students returning to their schools.”

Despite the uptick in travel, those numbers are down about 70% from a year ago, showing airlines still have a way to go before returning to normal demand levels for the peak summer season.

Political support has also grown for $25 billion in additional federal support for airline payrolls, helping lift airlines’ stock prices. The aid largely depends on whether lawmakers and the White House reach a deal for a broader coronavirus stimulus package.

Even with the rally, airlines’ shares are down sharply this year. Delta is down 50%, United has lost 53% and American is 48% since the end of last year. Southwest is down 33% this year, less than the others since it has a U.S.-focused network, unlike its larger competitors who have suffered from the pandemic’s impact on international travel.

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