Airline shares are going back and forth because of the pandemic

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What once was known as a steady and robust industry has struggled in times of the pandemic. People have always been excited about their air travels, especially if it is for vacation. During the pandemic, it somehow became a threat to the health of people. There was always the fear of contracting COVID even when there are protocols and safety measures. Today, some airlines require their crew, pilots, and passengers to get vaccinated before going on board the plane. Things have been improving, but some people, especially the investors, still got significant concerns.

Investors and airlines

We see that things are getting than the pandemic’s peak where there are global lockdowns and restrictions. Countries are opening up slowly but surely. Many are slowly are accepting the idea of welcoming back guests and tourists to save or improve their economy. Hence, investors see a ray of hope — hope for everything to go back to normal. On the other hand, some significant concerns are still rising. Whenever things seem to get better, people discover new variants. For example, the Delta variant where the first case reported was from India. It posed a concern for investors because it has been reported as a variant that is more infectious than the original strain. There are still chances of more lockdowns and travel restrictions. It is a push and pull for the aviation industry. Aviation stocks go back and forth. Stocks fell on Monday but made a smooth recovery on Tuesday.

American airlines and the pandemic

Analysts expected United Airlines to lose at least $4.23 per share on revenue of $5.25 billion in its Q2. However, the results showed worse results. They lost $3.91 per share on revenue of $5.5 billion. It is a valid reason for investors to feel fear, but United reassures them that the adjusted pre-tax income will be positive in this quarter.

That’s the spirit

People already made forecasts about the future of aviation. They say that business travel will be back to normal by 2022, and demand will be fully recovered by 2023. United is firmly optimistic about the future.

Jet Blue Airways and Spirit Airlines are also on their way to recovery, focusing on customers who seek leisure in vacation destinations. Their recovery will be relatively faster if more people become more open to going on a vacation. American Airlines Group has the most significant short interest among any other airline. It is a steady company, but it still needs to avoid a second wave similar to the spring of 2020’s travel demand.

Everything will go back to normal, hopefully.

These times are pretty unprecedented, but everything should go back to normal, especially with the improvements that we see lately. We are not sure whether the road to normalcy is smooth or not. But so far, we already saw few bumps we call the new variants. If everything is supposed to go normal, which it should, the most critical question is when. At least, United is not giving us any negative results as of now.

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