Although the resurgence of COVID-19 cases could clip the wings of the airline industry’s recovery in the near term, an expected increase in vaccination rates nationwide with the FDA’s full approval of Pfizer-BioNTech's two-dose vaccine bodes well for the industry. Therefore, prominent airline operators American Airlines (NASDAQ:AAL) and SkyWest (NASDAQ:SKYW) should benefit in the long run. But which of these stocks is a better buy now? Let’s find out. American Airlines Group , Inc. (AAL) in Fort Worth, Tex., and SkyWest, Inc. (SKYW) in St. George, Utah, are two popular airliners in the United States. AAL provides scheduled air transportation services for passengers, cargo, and mail service through its hubs and partner gateways worldwide. SKYW offers aircraft maintenance, airline reservations, conference travel, hotel reservation, car hire, online booking, and visa services worldwide. The company also leases regional jet aircraft and spare engines to third parties.
Although a strong vaccination drive helped the airline industry witness an uptick in demand earlier this year, the resurgence of COVID-19 cases will likely darken the industry’s outlook through the fall. According to the International Air Transport Association (IATA), the industry is expected to suffer a $47.70 billion overall loss in 2021. However, an anticipated increase in vaccination rates across the country with the FDA’s full approval yesterday of Pfizer-BioNTech's two-dose vaccine should help the industry return to its recovery path. Therefore, both AAL and SKYW could witness a solid recovery later this year or early next year.
While SKYW has gained 2.9% in price year-to-date, AAL has surged 21.2%. In terms of their past year’s performance, AAL is a clear winner with 57.2% gains versus SKYW’s 38.3% returns. But, which of these stocks is a better pick now? Let’s find out.