Air Travel Is Back to Pre-Pandemic Levels

[Hamartia Antidote]

Stansberry Research | World-Class Financial Research

We provide actionable investment recommendations and research for individuals self-managing their portfolios.

stansberryresearch.com

The Federal Reserve has worked hard to get a grip on inflation.

Its efforts are taking effect. Inflation has come down in recent months, but it's still higher than the central bank would like.

The good news is that's not stopping people from spending on big-ticket items like flights...

Millions of Americans traveled via airlines over the long holiday weekend. And as we enter the vacation-heavy summer months, this could be just the beginning.

Headline No. 1:

Air travel during Memorial Day weekend topped pre-pandemic levels.

McCall's Call: Memorial Day weekend, the Fourth of July, and Labor Day weekend are often the busiest travel days of the summer. Outside of the stretch between Thanksgiving and New Years, it's a good time to avoid the crazy lines at the airport...

And that's coming from someone who travels a lot!

The Transportation Security Administration ("TSA") screened nearly 10 million people last weekend, which surpassed levels from 2019. On Friday alone, the TSA had more than 2.7 million passengers clear its security checkpoints – marking a post-pandemic record.

This is great news. It's a sign that consumers are willing to spend on travel even though prices are up. According to the Consumer Price Index for airline tickets, airfare has risen about 25% over the past year. And in April, it was up big at 18.6%.

A handful of sectors will benefit from this bump in travel...

Obviously, the airlines sector is one. The easiest way to gauge this space is by looking at the U.S. Global Jets Fund (JETS) – which holds a basket of large airlines such as Delta Air Lines (DAL), Southwest Airlines (LUV), and United Airlines (UAL).

As you can see in the chart below, the Global Jets Fund has performed roughly in line with the S&P 500 Index this year. The Global Jets Fund is up a little more than 7%, while the broader index is up almost 10%.

Look for airline stocks to pick back up if these travel trends continue. We could even see JETS jump ahead of the S&P 500 into the end of the year – like it did in March.

But that's not all I'm watching in the travel space. I'm also keeping an eye on hotels and travel-booking firms...

Some of the biggest hotel stocks out there include Hyatt Hotels (H), Marriott (MAR), and Hilton Worldwide (HLT). And folks who want to book or plan a trip are likely using Booking (BKNG), Expedia (EXPE), and Tripadvisor (TRIP). These names provide a good idea of how the travel industry as a whole is performing.

The pickup in travel is also a good sign for the economy in general. It shows that despite higher prices, folks are still willing and able to spend on bigger-ticket purchases like trips.

And remember, this was only the first of the summer's busy travel weekends. That means even better figures and trends could be ahead.

​