3 Airline Stocks That Could Benefit From Leisure-Led Recovery

ABofA Securities survey of U.S. consumers supports a thesis that three airliners will benefit from a domestic and leisure-led recovery. 

The Analyst: Andrew Didora maintains a Buy rating on Alaska Air Group, Inc. ALK with an unchanged $53 price target.

The analyst also maintains a Buy rating on Allegiant Travel Company ALGT with an unchanged $140 price target and a Buy rating on Southwest Airlines Co LUV with an unchanged $44 price target.

The Thesis: BofA surveyed more than 4,500 consumers across the U.S. from May 28 through June 7. Here are some of the key findings. 

• Among those surveyed, 70% plan to take a leisure vacation, and 39% of those respondents expect to fly.
• One out of three travelers who fly at least once a year for business plan on taking a business trip within three months.
• Sixty-two percent of business travelers expect to travel by the end of the year.
• Only 32% of those surveyed plan on traveling internationally within six months.
• This implies that a return in international travel demand will notably lag the domestic recovery.
• More than half of people surveyed are comfortable traveling by plane when restrictions are lifted, even if there is no readily available vaccine.
• However, 24% of people aren't comfortable flying without a vaccine, and this implies it will take several years for air traffic to return to 2019 levels.