One of the few sectors left behind in the sharp April rebound has finally taken off. European airlines have rallied hard in the past few days, spurred by bailouts and economies reopening. Full recovery may still be a long way down the line, but investors don’t want to be left behind.
The Bloomberg EMEA Airlines Index has finally broken out of a tight range that held for more than two months. The index is up 32% since May 15, but such was the extent of the sector’s drop that it’s still down 45% for the year.
There’s been a string of positive news recently for the sector. Economies are slowly reopening across Europe, and tourists on the continent are likely to be able to travel this summer, even though Germany’s decision on travel warning was postponed to June 3. At a corporate level, there has been government support or bailouts for legacy airlines such as Air France-KLM and Deutsche Lufthansa AG.
