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Vaccine Progress A Boost for Airline Stocks

from ETF Trends March 23, 2021
Vaccine Progress A Boost for Airline Stocks

ETF Trends recently highlighted that vaccine progress could be a boost for airline stocks. Below is an excerpt from an article on dated March 9, 2021 by Max Chen:

As the Covid-19 vaccination process picks up pace, stranded travelers will soon begin to take flight…

The older generation has become more hopeful that things will return to normal and that they can return to their wanderlust years in retirement. According to Bank of America data, ‘traditionalists’ have exhibited a sharp increase in airline spending since the launch of vaccinations.

In a note to clients, economists at Bank of America Global Research led by Michelle Meyer pointed to a massive surge in spending on airlines the firm is seeing amongst its Bank of America cardholders who are most likely to be vaccinated, according to Morning Brief.

“We focus on spending trends amongst traditionalists which are aged 73-92 and are therefore most likely to have received the COVID vaccine,” the Bank of America economists said. “In particular, spending on airfare surged for traditionalists as compared to other generations — [the chart above]shows the indexed level of average spending by cohort to June 2020; traditionalists spending is now 4X the level in June.”

The firm added: “We do not see the same [spending]pattern for lodging which may suggest that traditionalists are traveling to see family rather than take vacations. Spending at restaurants and bars increased modestly for this cohort recently relative to other age cohorts but there was little difference in brick & mortar retail spend.”

Bank of America’s report may serve as confirmation of what many market observers have expected from consumers as the economy begins to re-open.

Keep reading more news on the airline industry by clicking here.

Opinions expressed and data provided are subject to change without notice. Opinions are not guaranteed and should not be considered investment advice. ETF Trends publisher Tom Lydon is on the board of U.S. Global Investors. The outbreak of the COVID-19 pandemic and the resulting actions to control or slow the spread has had a significant detrimental effect on the global and domestic economies, financial markets and industries, including airlines. U.S. Global Investors continues to monitor the impact of COVID-19, but it is too early to determine the full impact this virus may have on commercial aviation. Should this emerging macro-economic risk continue for an extended period, there could be an adverse material financial impact to the U.S. Global Jets ETF.