- 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.