U.S. airline stocks got a boost Monday from data suggesting weekend passenger numbers hit the highest levels in seven months as travelers continue to return to airports despite rising coronavirus infection rates around the country.
The Transport Security Administration said more than 1 million passengers were screened at U.S. airports Sunday, the highest since March 17. Screenings for the week ending on Sunday were estimated at 6.1 million, the TSA said, the highest since the start of the coronavirus pandemic.
Airline shares were also supported by American Airlines' (AAL) - Get Report decision to bring Boeing's (BA) - Get Report grounded 737 MAX aircraft back into service between New York and Miami later this year, a move that echoes the addition of domestic routes by rival United Airlines (UAL) - Get Report late last week.
“TSA has been diligent in our efforts to ensure checkpoints are clean, safe and healthy for frontline workers and airline passengers, implementing new protocols and deploying state-of-the-art technologies that improve security and reduce physical contact,” said TSA Administrator David Pekoske.
American Airlines shares were marked 0.7% higher in early trading Monday to change hands at $12.55 each, while United bumped 0.9% higher to $34.46 each. Delta Air Lines (DAL) - Get Report was marked 0.1% higher at $31.50 each while Southwest Airlines Co. (LUV) - Get Report gained 0.8% to trade at $39.97 each.
Last month, the airline sector's main international lobbyist said global passenger traffic is likely to be at least two-thirds lower than it was prior to the coronavirus pandemic.
The International Air Transport Association now predicts full-year traffic to be 66% lower than 2019 levels, following what it called 'hugely depressed' traffic levels in August that were impacted by new travel restrictions linked to the resurgence of coronavirus infections in Europe and North America.
In order to mitigate that decline, Bloomberg reported Sunday, IATA is working with the World Health Organization to create a coronavirus testing system that would replace compulsory quarantine rules for international travelers.
IATA said earlier this month that only 44 confirmed cases of COVID-19 have been directly linked to air travel, despite total global passenger traffic of more than 1.2 billion over the nine months ending in September.
"That’s one case for every 27 million travelers," said IATA medical advisor Dr. David Powell. "We recognize that this may be an underestimate but even if 90% of the cases were un-reported, it would be one case for every 2.7 million travelers. We think these figures are extremely reassuring."
"Furthermore, the vast majority of published cases occurred before the wearing of face coverings inflight became widespread,” he added.