Record-Breaking 3 Million Passengers Screened by TSA in a Single Day – What Does This Mean for Airline Stocks?

Denver, Colorado – The aviation industry in the United States saw a significant decline in passenger traffic during the early days of the Covid-19 pandemic. The Transportation Security Administration (TSA) reported a sharp decrease in the number of passengers screened at US airports, plummeting from over 2 million to less than 125,000 at the peak of the lockdowns.

As the summer of 2020 approached, there was a gradual improvement in passenger traffic, but it was not until the summer of 2021 that activity levels began to approach pre-pandemic norms. By the following summer, passenger traffic had largely returned to pre-Covid levels, and this summer has seen traffic trends consistently surpassing those levels.

Recently, the TSA set a record by screening over 3 million passengers in a single day, marking the first time this milestone has been reached. While air travel trends have rebounded to exceed historical ranges, airline stocks are still struggling to recover. The US Global Jets ETF (JETS) saw a significant drop in its value as air travel declined, but as passenger traffic began to improve, airline stocks gradually followed suit.

Throughout 2019 to 2021, TSA passenger traffic and airline stocks had a close correlation of +0.84, moving in tandem with each other. However, in 2022, this correlation reversed, with airline stocks moving in the opposite direction even as passenger traffic continued to rise. The JETS ETF remains significantly below its pre-pandemic peak, as investors and traders now focus on the debt and dilution these companies have faced in their recovery efforts.

Despite signs of improvement in air travel trends, concerns over financial stability and the Federal Reserve’s tightening policy have continued to weigh on airline stocks. The industry’s recovery remains precarious as it navigates the challenges posed by the ongoing pandemic and economic uncertainties.