IATA: Airline stocks rallybecause of vaccine news, despite falling passenger bookings
IATA reported (13-Nov-2020) the announcement of a COVID-19 vaccine by BioNTech and Pfizer resulted in "renewed optimism amongst investors about the future recovery in airline profits", leading to a 12% increase in airline share prices over four days.
IATA noted many countries are experiencing a resurgence in the pandemic and the recovery in air travel has reversed, with passenger bookings for future travel down 75% year-on-year as of 10-Nov-2020.
The association stated: "The current divergence between rising airlines' share prices and falling bookings highlights the forward-looking nature of the stock markets. The rising share value reflects investors' expectations that air travel and airline profits will recover, at least to some extent, next year. However, in the short-term, the business environment for airlines remains extremely challenging".
