Are Americans Ready To Travel? BofA Sees Biggest Airline Bookings Jump Since Pandemic Began

Airline stocks gained altitude Monday after the industry got some of the most encouraging data since the beginning of the pandemic.

What Happened: On Sunday, the Transportation Security Administration screened 1.34 million people — 86,000 more than on the same day a year ago.

The number of screenings was still down 45% from 2019 levels, but it’s the latest in a series of signs that the airline and travel industries are moving decisively in the right direction.

Why It’s Important: On Monday, BofA Securities analyst Andrew Didora said domestic leisure air travel bookings were down just 22.4% in the most recent week compared to 2019 levels, the first time leisure bookings were down less than 30% since the beginning of the pandemic.

“The combination of further progress on vaccine distribution, the re-opening of states, the relaxation of quarantines (NY domestic travel quarantine goes away April 1), and the start of peak leisure travel season should continue to drive positive travel headlines over the coming weeks,” the analyst said.

Analysts anticipate domestic corporate air travel will likely take much longer to recover. Bookings through corporate channels last week were still 78.3% below 2019 levels.

The good news on the bookings front had airline stocks trading higher Monday.

Delta Air Lines, Inc. DAL, American Airlines Group Inc AAL, Southwest Airlines Co LUV and United Airlines Holdings Inc UAL were all higher on the day.

United performed particularly well after the company said it anticipates positive free cash flow in the month of March. Southwest also said it expects its April 2021 load factor to be in the 70% to 75% range.

Southwest is Didora’s top stock pick among the “big four” U.S. airline stocks. BofA has a Buy rating and $60 price target for LUV stock.

Benzinga’s Take: All of the airline stocks have bounced back tremendously from their March 2020 lows as investors anticipate a sharp recovery in 2021 and beyond.

The biggest question marks at this point are just how long will it take for airlines to recovery the majority of their 2019 business and how much of that recovery is already priced into the stocks.