Why Airline Shares Are Rallying Today
Airline stocks took off on Wednesday on a report that additional payroll support could be included as part of a second government stimulus plan. Airlines and their unions had been lobbying for the provision, but it seemed like a long shot as recently as a few weeks ago.
Shares of American Airlines Group (NASDAQ: AAL) led the sector higher, up 8.5% as of 3 p.m. EDT, with shares of United Airlines Holdings (NASDAQ: UAL), Southwest Airlines (NYSE: LUV), Spirit Airlines (NYSE: SAVE), and Hawaiian Holdings (NASDAQ: HA) all up 4% or more, and JetBlue Airways (NASDAQ: JBLU), Alaska Air Group (NYSE: ALK), and Delta Air Lines (NYSE: DAL) up 3% apiece.
The airline industry has been hit hard by the COVID-19 pandemic, but the companies so far have been able to avoid bankruptcy in part thanks to a $50 billion lifeline for the industry included in the CARES Act. About half of that funding was in the form of payroll support, and was conditioned on the airlines agreeing to hold off on layoffs through Sept. 30.
Source Fool.com
