Airline shares surge as TSA numbers hit pandemic high, support for second bailout builds

  • More than 800,000people passed through U.S. airport checkpoints Sunday, the highest since mid-March.
  • Airline shares were headed for their biggest percentage gains in weeks.
  • The gains come as political support builds for $25 billion in additional federal payroll support for airlines.

Airline shares Monday headed for their biggest one-day percentage gains in nearly a month after federal data showed air travel at the highest volume in nearly five months and political support grew for more federal aid for the struggling sector.

The number of people passing through Transportation Security Administration checkpoints at U.S. airports rose for a second consecutive week with 831,789 people on Sunday alone, its highest level since March 17.

Despite the uptick, TSA traffic is still down by about 70% from the same time last a year ago, meaning airlines have far to go before recovering to normal levels, particularly in the crucial peak summer season.

American Airlines shares were up more than 8% in late-morning trading, while United Airlines was up more than 7%, Delta Air Lines was close to 7% higher, and Southwest Airlines was up close to 5%. The S&P 500 was little changed.

Zoom In IconArrows pointing outwards

Airlines financial losses are mounting and executives have warned more than 70,000 employees that their jobs are at risk when the terms of federal aid, which prohibit job cuts, expire in October.

Labor unions and airline executives have been pushing for $25 billion in additional aid to preserve jobs through March 2021, a proposal that has gained bipartisan political support in recent weeks. That sector relief that could be included in the next coronavirus aid package, but lawmakers failed to reach a deal for a new package last week.

President Donald Trump offered coronavirus aid through executive order over the weekend but Treasury Secretary Steven Mnuchin on Monday told CNBC that the administration is open to resuming negotiations with lawmakers.

Source: Read Full Article