- NYSE:DAL jumps by 1.76% to close the week amidst second straight day of broader market selloffs.
- TSA reports an increase of over 800% for passenger screenings through U.S. airports.
There have been fewer industries hit harder by the COVID-19 pandemic than the airline industry but a recent increase in stateside domestic travel demand has provided a small rally for airline companies. NYSE:DAL is now up 81% off its 52-week lows of $17.51 back in May but overall is still down over 46% from the 52-week, pre-COVID highs of $62. The Atlanta-based company recently warned of potential layoffs after the October 1st deadline from the federal bailout expires. Previously, Delta had reassured its employees that job security was safe, but the ongoing decline in world travel and presumed continuation of quarantine into 2021 has obviously changed the company’s tone.
Two of the other largest airline companies in the US United (NASDAQ:USL) and American Airlines (NASDAQ:AAL) are set to furlough 16,000 and 17,500 employees respectively after October 1st as the coronavirus continues to ravage the sector. While Delta has more or less avoided furloughs by issuing early retirement packages to many of its ageing employees – the firm still has plans to furlough nearly 2000 pilots as the volume of domestic and international flights has grounded to a halt. Despite the TSA reporting a near ten-fold increase in passenger travel on an average day in August compared to in mid-April, the airline industry advocacy group Airlines For America or A4A believes that normal domestic and international travel will not return to pre-COVID levels until 2024.
DAL stock chart
The A4A statement is a grim reminder to investors looking to get into the airline industry that there may never be a return to what we thought of as normal. Delta shares are up nearly 40% since the end of May but domestic travel threatens to stay at these depressed levels until the possibility of a coronavirus vaccine comes to light.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.