what happened
As expected, airlines have a large increase in travel during the holidays. But traffic levels were still far from historic highs, and the industry is still struggling. It puts airline shares on the first day of 2021, with shares of, under pressure Spirit Airlines (NYSE: SAVE), Delta Luglyne (NYSE: DAL), en American Airlines Group (NASDAQ: AAL) leads the downward pressure.
Approximately
The airline industry and its investors will be happy to see 2020 in the books. The pandemic led to a dramatic decrease in travel demand and caused revenue to fall.
The Transport Safety Administration selected approximately 324 million passengers in 2020, dramatically lower than the 824 million passengers selected in 2019. And although the number of passengers has been on the rise in recent months, it should continue to distribute the COVID-19 vaccines. the industry expects to have no recovery in the travel volumes of prepandemic for years.
Image Source: Getty Images.
During the recently concluded holiday period, more than 1 million passengers traveled most days most of the day, some of the highest total one-day totals since the start of the pandemic. But it is still well off of the daily travelers of 2 to 2.5 million daily travelers.
Investors take a half-empty look at holiday travel on Monday. Americans are the most guilty of the US airlines and can at least afford a long slump, while Delta takes a risky approach to blocking the middle seats – and thus limiting revenue – even though most of its competitors have refilled their huts . .
Spirit is expected to be one of the first airlines to recover, thanks to its low-cost structure and its focus on the holidaymakers who are expected to return before business tickets. All the airline shares have been offered for the past few months to anticipate the recovery, and investors can take profits today as the holiday rallies.
Now what
The good news for airline investors in 2021 is that we now know what to expect from the industry. The bad news is that we may not see any recovery soon.
The airlines need the money to survive, but it will take years before they are able to thrive. Even if the traffic does return above expectations, the carriers have incurred billions of new debts that need to be repaid before focusing on expansion.
For those with patience and the stomach to deal with turbulence, it is safe to shop at the airlines. Just get stuck and be prepared for a long, arduous journey ahead.