FORT WORTH, Texas (AP) – Airline stocks rose Monday, spurred on by signs that the introduction of vaccines later this year could lead to a rebound in travel.
American Airlines, meanwhile, announced plans to raise $ 7.5 billion. The airline said the measures would not add to its total debt. It follows similar steps by Delta Air Lines and United Airlines.
American liquidity has improved more than expected due to federal loans and funds to cover payrolls – aid that was extended in December and would receive another extension of the COVID-19 relief measure passed by the Senate over the weekend, according to Fitch Ratings.
“Meanwhile, the introduction of several effective coronavirus vaccines has increased the likelihood of a significant recovery in air travel from 2021 and decreased the likelihood that Americans will continue to burn cash for extended periods of time,” Fitch said.
American burned about $ 30 million in cash every day during the fourth quarter.
However, Fitch warned that air traffic remains low and the pace of recovery is uncertain.
Airlines have been particularly hard hit by the pandemic, and travel restrictions continue to eliminate most international flights, which are usually a lucrative part of their business.
But there are signs of improvement in domestic transport. After a cloudy January, the number of passengers has since increased. On Sunday, the Transportation Security Administration screened nearly 1.3 million people at U.S. airports. While this was a 41% decrease from the comparable day before the 2019 pandemic, it was better than the average decrease of 58% this year compared to 2019.
American Airlines shares rose 5% on Monday. United was up 7%, Southwest Airlines was up 6.4% and Delta was up 3.6%.