Why Airline Stocks Are Gaining Altitude Today
Delta Air Lines (NYSE: DAL) inked a massive new plane deal indicating the company is still bullish about the future of flight demand, and broader markets are rising on investor hope that the Federal Reserve can avoid a recession. The two news items are giving the entire airline sector a lift, with shares of Delta up as much as 6%, and American Airlines Group (NASDAQ: AAL), United Airlines Holdings (NASDAQ: UAL), and JetBlue Airways (NASDAQ: JBLU) all following close behind.
The biggest industry-specific news item driving airline stocks higher today involves only one airline, but there is a clear read through for the entire industry. Delta announced an order for 100 Boeing airplanes worth upward of $13 billion, a clear indication that the airline remains upbeat on the long-term growth forecast for the industry.
Delta is likely being opportunistic here, as Boeing is eager to move metal. But even when planes are on sale, airlines are reluctant to commit billions if they see too much uncertainty on the horizon. The entire industry was hit hard by the pandemic, and some fear business and international travel might not fully recover until the second half of the decade.
Source Fool.com
