Air travel remains far below its peak amid COVID-19, TSA data shows

Yahoo Finance’s Emily McCormick joins Akiko Fujita to discuss the outlook on air travel as states begin to reopen.

Video Transcript

AKIKO FUJITA: Airline stocks are moving higher today on signs of travel activity picking up at least over the holiday weekend. New numbers from TSA checkpoints point to more travelers passing through with each week-- certainly some signs of optimism for these airlines who have just been battered over the last two months. Let's bring in Emily McCormick, who's been watching some of the big names. You know, Emily, it's funny-- we had our guest on earlier, Jason Rotman, who said Delta is a good buy when you consider it's $25 a share. But certainly, a lot of-- all the major airlines are looking for a big pickup in activity now that we've seen the states start to ease some of the restrictions in place.

EMILY MCCORMICK: Absolutely, Akiko. And the data that we did get from the TSA did show a pretty big improvement from, really, that bottom that we saw in mid-April. But we have to remember that the checkpoint data is still about 86% lower as of yesterday than it was during the same day a year ago-- so still a long way to go until we're back at those pre-pandemic levels.

So just to give those specific numbers-- we had May 25 travelers through TSA checkpoints totaling just over 340,000. We were north of 250,000 for each of Sunday and Saturday of this three-day Memorial Day weekend-- so again, down 86% from May 25 last year, still a strong rebound from the just 87,000 or so travelers moving through TSA checkpoints as of April 14-- So at least seeing a little bit of a pickup, but not quite back at those levels.

And then this data is, of course, coming alongside dialogue around more states reopening, easing their lockdown restrictions. And that's really helped push airlines higher, at least in the US. I do want to give an update on some of those international airlines as well, because those have fared a little more poorly in the past couple of days if we look at these international carriers. We had LatAm Airlines Group, Latin America's largest airline carrier, filing for Chapter 11 protection today in New York after the COVID-19 pandemic did ground the bulk of its flights. And then over the weekend, to give another recap, we did see Germany agree to a $9.8 billion bailout for the carrier Lufthansa-- so a bit more of a mixed picture here that we have for global air travel, but at least in the US, data is starting to show a bit of a pickup. Akiko.

AKIKO FUJITA: Yeah, US airlines certainly were in a better position, at least in terms of their balance sheets, going into this pandemic. You know, you talk about the capacity that a lot of these airlines are operating at-- less than 50% for many of them. Have we heard from those airlines about how they're likely to update their operations as they see the activity pick up? Has their assessment changed at all?

EMILY MCCORMICK: Well, this is something that really is a moving target. Again, the data does continue to evolve over the day with the TSA checkpoint data. And of course, as we just look at the airline balance sheets, as you mentioned, overall, really getting a bit of a boost over the past month because of the filings, the loans, as well as some of the other aid that they receive from the federal government, totaling in the billions-- north of $25 billion overall for some of these major carriers.

And that's something that has really helped keep them afloat even in the absence of some of these pre-pandemic level travelers. But at the same time, it's something to continue watching going forward as, of course, we are quite back at the same level of troubles we had a couple months ago.

AKIKO FUJITA: And finally, Emily, on the travel front, we're not talking about airlines, but Six Flags announcing that they're going to be opening some of their operations. That's got to be good news, at least, on that front too-- I mean, a sign that things are slowly starting to open back up again.

EMILY MCCORMICK: Absolutely. So Six Flags is really contributing to the overall boost that we're seeing in travel and leisure stocks overall-- most of those companies moving in lockstep the past couple of months. So to give the specifics on the Six Flag announcement, we have the company opening its Frontier City Park in Oklahoma City with limited capacity starting on June 5th. And that's not the only update that we've really gotten over the past couple of days.

We also have casino stocks rising like Wynn Resorts, Hilton, some of these other hotel and casino operators. That's coming on the heels of announcements from things like Nevada's governor saying Friday that he was looking at a casino reopening date as of June 4th. And then we have California governor Gavin Newsom looking at and around June 8 opening date for casinos and card rooms. We also had casinos in Louisiana and Mississippi open in the past week-- so again, helping all of these travel and leisure stocks and casinos and hotels on the rise today. Akiko.

AKIKO FUJITA: Yes, certainly giving travelers at least something to look forward to in the summer months. Thanks for that, Emily.