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Aug. 11, 2020, 12:02 p.m. EDT

Airline stocks rally as travel demand increases, reaching new post-COVID-19 highs

Jets ETF rises toward 7th straight gain, which would be longest win streak in over 2 years

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By Tomi Kilgore, MarketWatch


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Airline stocks were broadly higher Tuesday, boosted by a continued rebound in traveler demand to fresh post-COVID-19 highs and upbeat analyst comments fueling investor interest.

The U.S. Global Jets exchange-traded fund /zigman2/quotes/207744796/composite JETS +3.22%  ran up 3% toward a near two-month high in morning trading. The ETF is on track for a seventh straight gain — it has surged 13% over the past six sessions — which would be the longest such streak since the eight-day stretch ended March 13, 2018.

Among the ETF’s most-active U.S.-based components, shares of American Airlines Group Inc. /zigman2/quotes/209207041/composite AAL +3.82%  hiked up 1.9%, United Airlines Holdings Inc. /zigman2/quotes/205037281/composite UAL +5.09%  rose 1.4% and Delta Air Lines Inc. /zigman2/quotes/200327741/composite DAL +5.24%  advanced 2.1%.

A MarketWatch analysis of data provided by the Transportation Security Administration , a part of the Department of Homeland Security, showed that travel demand has resumed its rising trend, after a two-week dip in July.

The daily average of travelers going through TSA checkpoints for weeks ended Sundays rose to 699,675 in the latest week, the highest daily average since the week ended March 22.

“People are likely looking to squeeze in travel ahead of back to school as spiking cases in mid-July delayed travel plans,” Becker wrote in a note to clients.

Daily, the number of travelers going through TSA checkpoints on Sunday rose to 831,789 from 683,212 on Saturday, and from 799,861 the previous Sunday, to the highest total since March 17.

On Monday, there were 761,861 travelers going through TSA checkpoints, the highest total for a Monday since March 16, which was the last day there were more than 1 million travelers (1,257,823).


U.S. Transportation Security Administration, MarketWatch

The increased travel demand comes as Cowen analyst Helane Becker said that while new COVID-19 case counts and hospitalizations remain high, they have recently started trending lower.

“We continue to believe there is coronavirus fatigue with some now looking to get back to normal life,” Becker wrote. “We expect to see TSA throughput trend higher this week, probably helped in part by college students returning to their schools.”

Mesa Air Group Inc.’s /zigman2/quotes/201991362/composite MESA +3.72%  stock surged 5.4% after Deutsche Bank analyst Michael Linenberg raised his rating on the air carrier to buy from hold, and boosted his stock price target to $5.50 from $4.00. The upgrade comes after Mesa Air reported a surprise second-quarter profit that rose from a year ago, although revenue fell more than forecast.

/zigman2/quotes/207744796/composite JETS 17.30, +0.54, +3.22%

Elsewhere, shares of Southwest Airlines Co. /zigman2/quotes/201071949/composite LUV +3.07%  climbed 2.8%, Spirit Airlines Inc. /zigman2/quotes/205782179/composite SAVE +2.04%  tacked on 2%, JetBlue Airways Corp. /zigman2/quotes/207639051/composite JBLU +3.64%  gained 2%, Alaska Air Group Inc. /zigman2/quotes/200972303/composite ALK +2.29%  were up 0.9% and Hawaiian Airlines parent Hawaiian Holdings Inc. /zigman2/quotes/203188135/composite HA +4.53%  rose 3.7%.

It’s unclear how news that Russia has registered the first vaccine to treat COVID-19, before even starting Phase 3 trials, is affecting airline stocks, given the uncertainties surround the effectiveness and safety of the treatment.

Don’t miss : Russia’s accelerated COVID-19 vaccine greeted with alarm as experts say Phase 3 trial is essential.

The Jets ETF has now run up 35.6% over the past three months, but has still lost 43% year to date. In comparison, the Dow Jones Transportation Average /zigman2/quotes/210598063/realtime DJT +1.52%  , which includes six airline components, has edged up 1.1% this year and the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.51%  has slipped 1.5%.

/zigman2/quotes/207744796/composite
US : U.S.: NYSE Arca
$ 17.30
+0.54 +3.22%
Volume: 3.81M
Sept. 28, 2020 4:00p
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/zigman2/quotes/209207041/composite
US : U.S.: Nasdaq
$ 12.76
+0.47 +3.82%
Volume: 63.56M
Sept. 28, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$6.25 billion
Rev. per Employee
$345,547
loading...
/zigman2/quotes/205037281/composite
US : U.S.: Nasdaq
$ 35.94
+1.74 +5.09%
Volume: 34.83M
Sept. 28, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$9.95 billion
Rev. per Employee
$448,946
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/zigman2/quotes/200327741/composite
US : U.S.: NYSE
$ 31.34
+1.56 +5.24%
Volume: 22.10M
Sept. 28, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$19.00 billion
Rev. per Employee
$499,337
loading...
/zigman2/quotes/201991362/composite
US : U.S.: Nasdaq
$ 3.07
+0.11 +3.72%
Volume: 315,887
Sept. 28, 2020 4:00p
P/E Ratio
3.81
Dividend Yield
N/A
Market Cap
$104.83 million
Rev. per Employee
$203,712
loading...
/zigman2/quotes/201071949/composite
US : U.S.: NYSE
$ 38.24
+1.14 +3.07%
Volume: 9.24M
Sept. 28, 2020 4:00p
P/E Ratio
95.20
Dividend Yield
0.00%
Market Cap
$21.88 billion
Rev. per Employee
$373,554
loading...
/zigman2/quotes/205782179/composite
US : U.S.: NYSE
$ 16.53
+0.33 +2.04%
Volume: 7.11M
Sept. 28, 2020 4:00p
P/E Ratio
90.92
Dividend Yield
N/A
Market Cap
$1.44 billion
Rev. per Employee
$431,115
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/zigman2/quotes/207639051/composite
US : U.S.: Nasdaq
$ 11.95
+0.42 +3.64%
Volume: 8.52M
Sept. 28, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$3.14 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/200972303/composite
US : U.S.: NYSE
$ 37.54
+0.84 +2.29%
Volume: 2.92M
Sept. 28, 2020 4:00p
P/E Ratio
87.81
Dividend Yield
0.00%
Market Cap
$4.54 billion
Rev. per Employee
$353,525
loading...
/zigman2/quotes/203188135/composite
US : U.S.: Nasdaq
$ 13.38
+0.58 +4.53%
Volume: 1.08M
Sept. 28, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
$588.76 million
Rev. per Employee
$391,501
loading...
/zigman2/quotes/210598063/realtime
US : Dow Jones Indices
11,440.95
+170.95 +1.52%
Volume: 160.83M
Sept. 28, 2020 5:06p
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
27,584.06
+410.10 +1.51%
Volume: 405.06M
Sept. 28, 2020 5:06p
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Tomi Kilgore is MarketWatch's deputy investing and corporate news editor and is based in New York. You can follow him on Twitter @TomiKilgore.

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