Good news on the efficacy of COVID-19 vaccines confirms stocks from airlines that have been among the most impacted by social activity constraints. Optimism in the industry, however, is still subdued, as the flight recovery will not be swift. Returning to pre-pandemic levels will take many years. However some airlines have the chance to rebound a little quicker than their rivals.
One of the first companies to start recovery may be Spirit Airlines Inc. (SAVE). The airline specializes in holiday flights that can first go back to the timetable. Furthermore, Spirit has low costs that can allow the business to use tariff reductions to boost demand. The airline is also trying to restore international flights that are popular with US residents, including flights to the Caribbean.
Other airline having a potential to recover earlier than others is United Airlines Holdings Inc. (UAL). The company will also easily return flights, once restrictions are removed, because the troubled Boeing 737 MAX aircraft is permitted to fly again after a year and a half of downtime. It will allow the company to better manage costs by using such aircraft during the recovery period, as the airliner is fuel efficient.
The aviation industry will have to operate for some time in challenging conditions of declining demand, despite the anticipated imminent availability of the vaccine. Even after the pandemic, business travel would be reduced by more than 50 percent, according to Bill Gate. The entrepreneur at the NY Times DealBook conference shared this view.
In addition, the airlines themselves are considering maintaining some of the COVID-19 related restrictions and rules. It is proposed to preserve the cabin distance between passengers as well as to carry out rapid checks for the presence of coronavirus, although this would raise costs and decrease the flight margin.
Spirit Airlines Inc. (SAVE) stock was up 0.99 percent at $22.98 on Wednesday while United Airlines Holdings Inc. (UAL) stock was at a rise of 1.51 percent to $45.64.