Talk about a turbulent week for airline stocks - and it's only Wednesday.
Shares of American Airlines (AAL) - Get Report, Delta Air Lines (DAL) - Get Report, United Airlines (UAL) - Get Report, Southwest (LUV) - Get Report, and others were all higher on Wednesday, reversing Tuesday's declines, after President Donald Trump said he would consider alternative measures to the Democrat’s current fiscal package.
Airline stocks dropped sharply Tuesday after Trump tweeted that the Senate would no longer consider the $2.2 trillion stimulus bill proposed by House Democrats, dashing hopes for airlines that they might be able to hold off large-scale furloughs and layoffs.
Airlines had been barred from furloughing or laying off workers until Oct. 1, under the terms of the previous $25 billion in federal aid they received earlier this year.
But they recovered on Wednesday, with all of the major airlines posting gains, after Trump said he would still sign off on fiscal stimulus that would also include an additional $25 billion to help support the airline industry, which continues to bear the brunt of the pandemic and dramatic drop in business and leisure travel.
To be sure, airlines have other options, including asking workers to take pay cuts and taking on more debt. Most of the major carriers have signed “letters of intent” to tap some $29 billion in federal pandemic relief loans though have not exercised the option.