Sep 02, 2020 (Baystreet.ca via COMTEX) -- Airline and cruise ship stocks are enjoying an uptrend for the same reasons as in June. Enthusiasm and hope of sustained growth in passenger traffic are lifting Delta /zigman2/quotes/200327741/composite DAL +7.05% and American Airlines /zigman2/quotes/209207041/composite AAL +3.18% stock.
In light of the pandemic still at its worst in the U.S., is it safe to invest in airlines?
Traders could speculate that the world will have the virus spread under control. Stronger enforcement of physical distancing and wearing masks are a start. Rapidly testing people and screening temperature, through FLIR Systems' heat-sensing cameras, at airports are a must.
This would allay consumer fears over tourism travel involving the plane.
All of these ideas are purely speculative. Investors must look at two data points regularly to know when it is safe to invest in the money-losing airline companies. First, monitor the coronavirus infection rates in the U.S. and worldwide. If death rates are falling and infection rates are down, air travel volumes could rise.
Second, investors should visit the TSA - Transportation Security Administration - traffic regularly. For example, for the week ended August 27, total traveler throughput was 721,060. This is still below the August 23 high of 841,806. Word of business travel budgets expanding and company staff using Zoom /zigman2/quotes/211319643/composite ZM +1.43% less is a positive sign for airlines. Look for that signal before accumulating airline stocks.
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