The impact of COVID-19 is already being felt across the economy. Perhaps no more than in the hospitality and travel industry. As people social distance, quarantine themselves and work from home, travel activity has screeched to a halt, which has sent shares of many firms within the industry plunging to levels not seen since the September 11 terrorist attacks, and the Great Recession. The hardest hit has been, surprisingly, the airlines.
This news comes at a time when airline stocks were entering their halcyon days – full of profits, positive cash flows, and even dividend growth.
This begs the question: are airline stocks worthy of bargain shopping? Or is COVID-19 masking a deeper problem in the industry? Is the sector a value or a value trap?
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