The resurgence of COVID-19 cases continues to dampen the airline industry’s growth prospects. Indeed, investor optimism about the vaccine-driven recovery in leisure travel has helped only American Airlines (NASDAQ:AAL) and Controladora Vuela Compañía (VLRS) outperform the S&P 500 this year. So, we think it could be worth adding these two stocks to one’s watchlist. Read on.The resurgence of COVID-19 cases has been taking a heavy toll on the airline industry. Commercial flights arriving at U.S. destinations daily earlier this month showed a significant decline from the same period in 2019.
According to The Boeing Company’s (NYSE:BA) vice president of commercial marketing, Darren Hulst, the industry will recover to 2019 levels of traffic by the end of 2023, early 2024. The plane maker expects international routes to take the longest time to recover, however.
Despite the industry’s weak growth prospects, investors’ optimism about a recovery in demand for leisure travel on solid progress on the vaccination front has helped American Airlines Group Inc. (AAL) and Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (VLRS) perform well so far this year. In fact, these are the only airline stocks that have outperformed the broader S&P 500 index year-to-date. AAL and VLRS have gained 25.1% and 73% in price, respectively, versus the S&P 500’s 18% returns year-to-date. So, it we think could be worth adding these two stocks to one’s watchlist.