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The pandemic can’t end soon enough for airlines, but investors have priced the carriers’ shares as if the end is in sight.
Airline stocks have climbed sharply as vaccine approvals have lifted hopes for travel, and they are no longer bargains. The sector has gained 39% since early November, versus 13% for the S&P 500. While a few stocks look appealing as longer-term bets, investors might need to ride out some turbulence.
Airlines have hardly found their wings. Domestic travel is hovering at 35% of prepandemic levels, while international is down more than 80%. A $15 billion cash infusion from Washington, part of the new stimulus package, would help cover payrolls and avoid more furloughs at companies such as