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On Thursday, American Airlines (AAL) stock jumped 41% to $16.72 at the close, which is the biggest gain since 2013 when the company merged with US Airways. The jump followed the carrier’s announcement about boosting its capacity.
As the global economy is recovering from the COVID-19 crisis, people are getting back to normal life and enjoying entertainment and traveling again. Amid the economic rebound, American Airlines Group Inc (NASDAQ: AAL) company indicated that the worst is over and now it’s capacity is boosting. As a result of the announcement, American Airlines stock is soaring.
The largest U.S. carrier said it would boost flights in July 74% compared with this month. In July, American Airlines plans to operate 55% of the US flights it ran in July 2019, a huge increase over the 20% schedules it ran in April and May. Besides, it will operate 20% of the international flights that it ran last July. According to American Airlines, its capacity in June is 30%, while July capacity will be 40% of that a year earlier.
American Airlines CEO Doug Parker said:
“As we plan for a post-coronavirus recovery, we know we will be living with the effects of the pandemic for some time.”
The company’s Vice President Vasu Raja stated:
“People are hungry, eager to get back into the economy. We feel real confidence to fly a much bigger July.”
According to Raja, the busiest days next month will have about 4,000 flights, up from 2,300 in June. In May, the peak was 2,000 flights, still down from 6,800 daily flights before the crisis.
American Airlines Stock Is Up
Following the carrier’s prognosis, its stock soared. On Thursday, American Airlines’ shares jumped 41% to $16.72 at the close, which is the biggest gain since 2013 when the company merged with US Airways. The previous record rally of 35.8% was on March 24. The 44% weekly gain is also the biggest-ever weekly gain American Airlines had.
Trading volume soared to 302.3 million shares, surpassing the previous record of 138.1 million shares on April 7.
In the pre-market today, American Airlines stock is 18.72% up, at $19.85.
Airline Industry Rally
American Airlines stock’s surge was one of the leading the S&P 500 Index and sparked a broader industry rally. The other US and foreign carriers also started adding flights to summer schedules, and their stocks responded by jump.
For example, United Airlines Holdings Inc (NASDAQ: UAL) stock rose by 16.20% to $39.10 at the close on Thursday. It was one of the most active ETF’s components. Its trading volume made up 137.8 million shares. In the early trading today, UAL stock is 13.76% up, $44.48 per share.
Delta Air Lines Inc (NASDAQ: DAL) stock soared by 13.73% on Thursday and closed at $32.38.In the pre-market today, it has added 11.18%, climbing to $36.00.
But not only airline stocks are rising. The broader sphere of travel-related companies is experiencing an upward trend. For example, the stock of Boeing Company (NASDAQ: BA) is moving higher as well. It jumped by 6.43% to close at $184.30 yesterday. In the pre-market today, Boeing shares are 4.83% up, at $193.20.