Airline Recovery Continues Even As Some Cut Trips: Watch Out For These Airline Stocks

A recovery for airline companies is in the works. The industry accrued a total of $4.1 billion in July ticket sales — a 947% increase compared with the prior year’s numbers, according to Airlines Reporting Corp

What Happened: In the U.S., domestic travel has been increasing for several months, while only slightly tapering in recent weeks. But despite the positive trends, July saw the first monthly decline in sales after seven consecutive months of growth. Domestic flights dropped by 2% and international trips dipped by 10%. 

Brett Snyder, who has worked in the airline industry since the 1990s and is host to the Cranky Flier blog, reported that and Delta DAL and British Airways are cutting flights in the U.S., some of which are to occur during the business-heavy times of the December and January holiday season. Frontier Group Holdings ULCCUnited Airlines Holdings UAL are also cutting some of their flight schedules in the near term. 

It’s not exactly known why airlines are cutting flights, but some analysts have suggested that public desire for flying has sped up quicker than the industry anticipated, causing a need for supply to catch up with demand. Delta Air Lines and United Airlines have both seen stock drops in the past six months, making them an interesting buying opportunity. 

What Else: Domestic flights in China have stalled as the country has gone into an August lockdown. International Air Transport Association said the lockdown could slow the airline industry’s recovery. 

“Weakening of #China domestic #airtravel market poses a risk to the recovery,” the organization recently tweeted

The stalling in China is in part due to the delta variant that has spread across the American south and the world, according to the flight tracking data company FlightAware.

China is known for trying to get ahead of outbreaks, thus shutting down before the virus has spread out of control. 

"Due to the rising cases of the COVID-19 delta variant, China has introduced mass travel restrictions causing a 48% (5,975 flights) decrease in daily commercial airline traffic from the beginning of August to August 16, 2021,” FlightAware tweeted last week.

Despite the flight slowdown, as China’s economy grows, so too are its airliners. The country’s airline services are projected to net over $40 billion by 2026, according to a recent report

Photo: Philip Myrtorp via Unsplash.

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