After a relatively tumultuous month, airline stocks across the board enjoyed a steady upward draft heading into market close today. Delta (NYSE:DAL), Southwest (NYSE:LUV), American Airlines (NASDAQ:AAL), JetBlue (NASDAQ:JBLU) and United Airlines (NASDAQ:UAL) are each up more than 6% on the day.
So, what’s going on with these high flyers today?
Despite the omicron variant chatter, which is typically a detriment to airline stocks, it seems pent-up holiday spirit got the better of the industry today. This Thanksgiving saw more than 2.5 million people travel for the holiday, the most air traffic since February 2020. Many of the major American airlines have seen precipitous gains since then.
The big winner, American Airlines saw the most action this past holiday, reportedly sending 1,500 more flights than any other carrier. This comes as American announced an offset agreement with natural gas company Aemetis (NASDAQ:AMTX) for 280 million gallons of sustainable aviation fuel over the next seven years. American ended the day up 7%.
On the market, however, Delta proved to be king of the sky. DAL jumped more than 9% today.
What to Expect for Airline Stocks Heading Into Holiday Season
Despite today’s generous gains for the industry, future outlooks appear mixed. Considering that the first case of the omicron virus appeared in the United States yesterday, airlines are likely to suffer the repercussions, sooner or later.
United already reported seeing an immediate effect on bookings, and expected passenger forecasts for the next year have already been lowered.
According to Deirdre Fulton, a partner at MIDAS Aviation, “It feels a little bit like we are back to where we were a year ago and that’s not a great prospect for the industry and beyond.”
Despite the cracks of daylight that have come and gone, the pandemic economy remains. Some countries are even restricting international travel or requiring proof of a negative Covid test prior to travel.
The impact will vary country to country, but its affect on airlines will be negative, likely across the board. As such, the jump in airline stocks today should be taken with a grain of salt: Covid isn’t gone.
On the date of publication, Shrey Dua did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
