Airline investors were disappointed a few months ago, when Congress failed to renew the payroll support program that prevented involuntary layoffs and furloughs in the sector from April to September. The initiative had bipartisan support , and there was clear evidence by October that air travel demand would remain extremely low for many more months. Nevertheless, the proposed payroll support extension died over partisan disagreements about other potential relief measures.
However, Congress is reviving the payroll support program in a slimmed-down format as part of the new coronavirus stimulus bill. This is great news for airlines, especially leisure-focused carriers such as Hawaiian Holdings (NASDAQ: HA) and Spirit Airlines (NYSE: SAVE) that are feeling some strain on their balance sheets now but could benefit from a leisure demand recovery starting next spring.
Image source: Spirit Airlines.
For further details see:
New Coronavirus Relief Aid Gives Airlines a Huge Shot in the Arm