Race To Takeoff
Although the stock market recovered very quickly from COVID-19, other areas of life have lagged – one of them being travel. Today, however, leisure travel has recovered to 2019 levels, while business travel is also rebounding. The only thing that still seems to be in lag to recover is the economy, still bogged down by inflation and unemployment. But at least travel is picking back up and people can take their much-needed vacation. But this return to travel may be occurring a bit too fast for airlines to keep up with, that’s because when COVID-19 began, most airlines urged pilots and other employees to take early retirement and leaves of absence at less pay to minimize airline expenses and weather the pandemic.
However, this also meant the airlines would park hundreds of planes – and retire some altogether. The government aimed to stop this by providing airlines $54 billion in federal aid since March 2020 in exchange for not laying off workers. However, shorter, and less frequent flight schedules meant pilots weren’t getting their minimum flights required to maintain their flying status. As a result, airlines are currently scrambling to hire new pilots. Flight simulators at airports across the country from Atlanta to Dallas to Miami and elsewhere are buzzing to train hundreds of pilots and meet the surge in bookings. What do you think about the airline training frenzy? And is this good or bad for airline stocks?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.