Can This Partnership Ignite A Rebound For These Top Airline Stocks In 2020?
It is no surprise that airline stocks have been down just like many other sectors in the market. All airline stocks and many travel stocks were horribly affected by recent economic events. But some top airline stocks have begun to rise up from their recent lows. Airlines are doing whatever they can to stay flying. Many airlines have opened back up a large percentage of their routes.
Another way airline stocks can do well is if there is a partnership deal between two companies. Since the airline industry is in such a dark place, companies are looking for any way to see some light. Ticket sales are down significantly and a second spike of the coronavirus occurred, airline stocks have not been able to fully recover in the market. People are still worried about traveling and catching the virus.
Flight demand is still rising though, and ticket sales have seen some increase. As many states prepare to lockdown again though, it would make sense if airline stocks do not recover for a while. That is why airline stocks are so interesting to watch. Many airline stocks have the potential to rebound if people start traveling more again.
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A Mutual Partnership Between Airline Giants
On July 16th, a surprise partnership between JetBlue and American Airlines was announced. JetBlue Airways Corporation (JBLU Stock Report) is a low-cost airline that was founded in 1998. Currently, JetBlue is the 6th largest airline in the US by passengers. JetBlue also is number 399 on the Fortune 500 list by revenue. American Airlines Inc. (AAL Stock Report) was founded in 1926 and is the world’s largest airline by passengers, fleet, and revenue. When fully operating American Airlines runs nearly 6,800 flights a day. This means more than 500,000 passengers fly American Airlines every day when fully operating.
This partnership between JetBlue and American Airlines allows them to sell seats on each other’s planes. This gives both brands more market share in New York and Boston. The chief revenue officer of American Airlines, Vasu Raja, said in a statement, “JetBlue has always had great, great brand strength in New York and Boston. American for years, we struggled to be relevant in those two markets. By contrast, American has immense relevance for customers across the Midwest, the Southeast … and even a big global reach, too”
This partnership was reportedly already in the works before the coronavirus pandemic happened. Nobody knows if the effects of this partnership will be positive or even make a difference. Only time will tell if these two companies partnering up will benefit them in the long run.
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How This Deal Affect JBLU & AAL Stock?
Now that we’ve discussed the JetBlue and American Airlines deal, let’s talk about how it affected stock prices for both of these companies. In many scenarios a partnership like this can be great for a stock. Airline stocks definitely need a boost at the moment so this could potentially cause them to rise.
First, let’s talk about American Airlines stock. On July 15th, AAL stock rose up from $11 a share on average to $12.50 a share on average. On this day AAL stock price also reached up to $13.44 a share. But then when July 16th came around, AAL stock fell to $12.60 a share on average. You may be wondering, why did AAL stock price not rise after this partnership was announced? Well, AAL stock didn’t rise because there is no evidence that this deal will benefit the company yet. This is why the AAL stock price has the potential to rise in the future. The possibility of AAL stock rising due to the effects of this deal and reopening makes it an interesting airline stock to watch.
Now let’s discuss how the deal impacted JetBlue stock price. On July 15th, JBLU stock saw an increase just like AAL stock did. JBLU stock price rose from $10.30 a share on average to $11.20 a share on average. It also reached $11.54 at JBLU stock high on the 15th. Just like AAL stock though, JBLU stock price fell on the 16th. As of the 16th JBLU stock is at $11.20 a share on average. This is for the same exact reasons as AAL stock falling. The deal has no evidence that it will cause either of the companies to profit. That’s what makes JBLU stock an airline stock to watch.