Ever since the novel coronavirus came to the U.S., it’s been an uphill battle to get people back on airplanes again. Fear of getting sick has made business difficult for Delta Air Lines (NYSE:DAL) and, as a result, the DAL stock price remained under pressure for much of 2020.
November could be a major inflection point for DAL stock, however. As the share price starts to curl upwards, it’s possible that we’re witnessing a turnaround for the airline industry in general and for Delta Air Lines in particular.
Of course, we don’t want to invest in DAL stock just based on a hunch. Informed investors should demand hard data, so we’ll check the stats to see if a comeback is truly afoot.
And as we enter the final month of a difficult year for the travel market, a post-Thanksgiving analysis of the data might actually give DAL stock holders something to be thankful for.
A Closer Look at DAL Stock
During the first half of this year, DAL stock holders suffered the same hardship that other airline investors did. It was a dreadful time as the DAL share price plummeted from the 52-week high of $62.48 to the 52-week low of $17.51.
DAL stock did show some signs of life in early June, though, as the bulls attempted to stage a recovery. They even managed to push the share price up to the $37 area.
Yet, that only proved to be a resistance point as DAL stock soon fell back down to the $25 level. Months later, in November, the DAL bulls took another shot at staging a breakout.
This time, they succeeded in pushing DAL stock above the $37 resistance point. Indeed, on Nov. 27, the share price settled slightly above $41. The next objective should be to keep the stock price near that level while preparing for a push above $45 and then $50.
A Very Busy Weekend
Now, let’s go back in time to the weekend that ended on Nov. 22. With a second or possibly a third wave of the coronavirus pandemic surging, you might expect pre-holiday air travel to be muted.
There was even a recommendation from the Centers for Disease Control and Prevention that Americans should skip Thanksgiving travel. So, did Americans heed the warning and stay home?
Actually, the data shows that the travel volume increased. During the three days ending on Nov. 22, the Transportation Security Administration (TSA)’s data indicated that 3,052,139 people went through TSA checkpoints.
Believe it or not, more than 1 million people traveled on airplanes Friday, Nov. 20. Plus, more than 1 million people traveled on Sunday, Nov. 22. That Sunday set a short-term record with 1,047,934 travelers, the highest single-day total since March 16.
The Travel Trajectory Persists
Those are astonishing numbers, no doubt. But as Thanksgiving day drew closer, did air travel volumes drop off?
The data suggests that the answer is no. On Nov. 25, the day before Thanksgiving, the TSA recorded 1,070,967 clearing airport security.
With this, the previous short-term record was now broken. TSA spokesperson Lisa Farbstein marked the event with a tweet:
“Yesterday, Wednesday, Nov. 25, @TSA screened 1,070,967 people at checkpoints nationwide. It’s the highest volume since March 16 and only the 4th time passenger throughput has topped 1 million since that date. Last year 2,602,631 people were screened on Thanksgiving eve.”
That last sentence in Farbstein’s tweet deserves our attention. Just because air travel volumes are surging, doesn’t mean that we’ve topped out.
There’s still plenty of room to run, both for passenger volumes and for DAL stock. If the current trend persists, a full recovery could be in store for the airlines and their stakeholders.
The Bottom Line
One way to gauge the recovery of the airline industry is through the TSA’s travel volume numbers.
Using this metric, it appears that U.S. airlines are on the road to recovery. That’s bullish for DAL stock, and this could be the perfect to buy shares as there’s still room for the numbers to improve.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.
