Airline Stocks Are Just Part of the Story

There are many elements that make up a story. This story is about the slow recovery of the airline (and travel) industry. 

First, two key indicators have come up in the news this week.

One, as of June 8 reporting, the Transportation Security Administration (TSA) reported that the number of passengers it screened in U.S. airports was more than 441,000. This was an increase of more than 400 percent in volume from the low of 87,500 in mid-April. 

And two, the stock market also saw a surge this week, with airline stocks posting their best week on record. 

But none of that matters without three. Three is, according to CivicScience data on the matter, the near future is indeed at least starting to look good for airlines and travel, Wall Street aside. That’s because consumer comfort in traveling saw a slight rise last week compared to the prior week. Twenty-five percent of American adults now say they they are comfortable traveling in under a month. While the number of people saying they’d be comfortable traveling / going on vacation in less than one month’s time has steadily increased, the number of people who would wait 6+ months started to significantly dip a bit more, too.

This is arguably one of – if not the most – important elements of the story of travel industry recovery. Consumers decide. While we can’t say exactly where this is headed, the industry should be encouraged by this uptick, however slight.

While the above question does not specifically address airline travel, it is clear that consumer confidence in taking a trip of any kind is starting to rebound. But it’s subtle.

But now we get to part four – the downer – in which further CivicScience data indicate that consumers’ willingness to travel by air specifically is still stagnant as a result of the crisis, not having budged since April.

The percentage of people who plan to travel by air in the next six months has risen by just 1 percentage point since April. That’s staggeringly low.

It is clear that people will start to feel more comfortable traveling, little by little, but people are more reluctant to make plans for airline travel. The road ahead will no doubt be a long (and winding) one for the airline industry.