Airport Passenger Traffic Soars Beyond Pre-Pandemic Peaks, Yet Airline Shares Remain Consistently Subdued

TSA data shows travelers blazing a trail toward record levels of air travel in 2024. Daily volume through US airport security checks is expected to surpass 3 million passengers for the first time ever this weekend. Despite the uptick in demand for flights, the airline industry’s financial performance has been subdued over the course of several years by rising costs and persistently narrow margins. Energy and labor expenditures are much higher today than they were prior to the COVID-19 pandemic and swelling overhead risks being exacerbated by a slowdown in jet deliveries from Boeing.

Related ETF: U.S. Global Jets ETF (JETS)

Sunday marked the busiest day ever at US airports, as Transportation Security Administration (TSA) data shows nearly 3 million airline passengers were screened. That broke the previous record set on May 24, the Friday prior to this past Memorial Day weekend. 171 of the 175 days (98%) tracked by the TSA so far this year – excluding February 29 since it was a leap day – have seen a greater volume of travelers pass through airport checkpoints compared to 2023. A tally of 147 days in 2024 (84%) have surpassed 2019’s figures, suggesting the US is closer to a full recovery to pre-pandemic levels of air travel than ever before. This year marks the first time that TSA security checks to June 24 have surpassed those of the same period in 2019. If the 2024 growth trend was consistent through year end, the increase in airport traffic over 2019 levels would be equivalent to more than 53 million passengers.

Indeed, the TSA sees the busiest days of the summer travel season yet to come. The agency expects to screen more than 32 million travelers during the 2024 Independence Day travel period that runs from June 27 through July 8, up is 5.4% YoY. Friday is projected to be the first time TSA will screen more than 3 million passengers in a single day. Per Reuters, Industry group Airlines for America has said carriers plan to fly more than 26,000 flights per day this summer, marking an increase of nearly 1,400 (5.6%) over 2023 to accommodate for increased demand for air travel. These figures would seem to show that airlines are experiencing a boom, but their financial performance has not been nearly as optimistic.

Shares of the US Global Jets ETF (JETS), largely weighted toward North American airlines, are virtually unchanged over the past six months, vastly underperforming a 14% gain in the S&P 500. When that comparison is…