Tesla and Apple aren’t the only stocks surging — look at airline stocks

Tesla stock (TSLA) and Apple stock (AAPL) aren't the only big names lighting up the market right now — take a look at how major airline stocks are soaring as the summer travel season heats up.

Delta Air Lines (DAL) stock closed its 13th straight day of gains on Tuesday, up more than 2% in midday trade. According to Yahoo Finance, the stock is up more than 23% over the past month Data. United Airlines (UAL) was the second best performer over the past month, up 17%.

JetBlue (JBLU) and American Airlines (AAL) are up about 15% over the past month. Southwest (LUV) is lagging the airline rally with a still respectable monthly gain of 12%.

There are likely two factors behind airline stock prices.

First, there's the huge demand for travel at the moment – which appears to have been strong over Memorial Day weekend and now into July 4th.

MADRID, SPAIN – 06/10/2023: A commercial Iberia Airbus A319 flies over the skyscrapers of the Madrid skyline known as the “Four Towers Business Area” after departing from Adolfo Suarez Madrid Barajas Airport. (Photo by Marcos del Mazo/LightRocket via Getty Images)

“I was just looking at some July 4th data,” Marriott International (MAR) CEO Anthony Capuano said in an interview with Yahoo Finance Live last week (video above). “Revenue per available room is up about 10%. Advance bookings through to the end of the year appear to be particularly strong.”

The upbeat outlook was echoed by Marriott's longtime rival Hilton (HLT).

“Demand is strong across the board, I don't care where in the world you are,” Hilton CFO Kevin Jacobs said on Yahoo Finance Live. “We don't have month-long visibility in our store, but from what we can see it's going to be another strong summer.”

According to data from the travel booking portal Expedia (EXPE), flight searches from June to August increased by a total of 25% compared to the same period last year. Interest in more expensive travel to international destinations in Europe and Asia has increased by three digits.

The aforementioned American Airlines recently raised its guidance for the second quarter, citing continued strong demand and lower fuel costs.

“We're seeing tremendous demand,” Expedia CEO Peter Kern told Yahoo Finance.

A business jet is refueled with Jet A fuel at Henderson Executive Airport during the National Business Aviation Association (NBAA) exhibition in Las Vegas, Nevada, the United States, October 21, 2019.  REUTERS/David Becker

A business jet is refueled with Jet A fuel at Henderson Executive Airport during the National Business Aviation Association (NBAA) exhibition in Las Vegas, Nevada, the United States, October 21, 2019. REUTERS/David Becker

The second factor at play is the collapse in kerosene prices.

Kerosene prices have fallen about 38% since mid-January, according to IATA data.

“The airline's financial performance in 2023 is exceeding expectations,” said Willie Walsh, IATA's director-general, in a statement. “The higher profitability is supported by several positive developments. China lifted COVID-19 restrictions earlier in the year than expected. Freight revenue continues to be above pre-pandemic levels, even as volumes have not. And on the cost side, there's some relief. Jet.” Fuel prices, while still high, have moderated in the first half of the year.”

To that end, IATA updated its industry-wide 2023 net income outlook this month to $9.8 billion, up from its December forecast of $4.7 billion.

Coupled with strong demand signals, Wall Street seems to be betting on strong airline profits in the third quarter. And possibly good prospects for holiday travel.

As for Apple and Tesla… stocks are up 7% and 53%, respectively, over the past month.

Not too shabby either.

Brian Sozzi is Editor-in-Chief of Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and further LinkedIn. Tips on the banking crisis? Email [email protected]

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