Even with general progress being made worldwide regarding stemming the COVID-19 pandemic through mass vaccinations, Europe is again witnessing a surge in COVID-19 cases. With many European countries announcing new restrictions, we think it could be wise to avoid fundamentally weak airline stocks Delta Air Lines (NYSE:DAL), United Airlines (UAL), and American Airlines (NASDAQ:AAL). Read on.While countries worldwide are trying to return to normalcy, the latest news reports from various parts of Europe point to a sharp surge in COVID-19 cases. Germany reported its highest number of infections in a single day since the start of the pandemic. Similarly, Austria and the Netherlands have implemented partial lockdowns to prevent the virus’ spread.
Virgin Galactic Holdings, Inc.’s (NYSE:SPCE) Richard Branson once famously said, "If you want to be a millionaire, start with a billion dollars and launch a new airline." Airlines as a business venture are often highly risky due to the industry's uncertainty. The airline industry was already facing headwinds before the pandemic. And even with the elimination of some restrictions, widespread anxiety due to the healthcare crisis remains.
With the COVID-19 situation deteriorating in Europe, the airline industry is again expected to receive a blow as rising infection rates and restrictions reduce travel demand. Amid this scenario, we think it could be wise to avoid airline stocks Delta Air Lines, Inc. (DAL), United Airlines Holdings, Inc. (NASDAQ:UAL), and American Airlines Group Inc. (AAL).