Will Donald Trump's Win Boost US Airline Stocks Even Higher?
The stock prices of major US airlines surged following the announcement of Donald Trump's victory in the 2024 election. Investors are optimistic that a second term for Trump could lead to less regulation for the airline industry.
On November 6, stocks for the "big three" US airlines saw significant gains in pre-market trading. Delta Airlines rose by 6.21% to $61.91, United Airlines stocks climbed 7% to $85.70, and American Airlines gained 5% to $13.88. Even low-cost carriers like Southwest Airlines and Spirit Airlines saw early boosts.
This surge is majorly attributed to the expectation that Trump's administration will take a more relaxed approach to regulation, including mergers and acquisitions. In the past, the Trump administration was seen as more favorable to business, with reduced oversight in industries like airlines.
Matthew Klint, a writer for “Live And Let's Fly,” believes that airlines will likely face less scrutiny regarding mergers under Trump. He notes that American Airlines is already exploring a new alliance with JetBlue.
The possibility of fewer regulatory restrictions could also lead to a revival of airline mergers, which have been less common under the Biden administration. Trump's pro-business stance during his first term was marked by a hands-off approach to airline deals. This included less aggressive challenges to mergers from the Department of Justice.
However, some analysts warn that Trump's return to the White House could mean the rollback of certain consumer protections introduced under the Biden administration. For example, the Department of Transportation recently passed a law requiring airlines to offer automatic cancellation refunds. Analysts predict that such protections might be diminished or eliminated under Trump's leadership.
Sarah Kopit, Editor-in-Chief of Skift, remarked, "For airlines, which faced intense regulatory scrutiny over the past four years, Trump's policies could ease pressure around deal-making." She also noted that the Department of Justice's recent inquiries into competition in air travel may fade, along with proposed rules requiring more fee disclosures from airlines.
The immediate response in the airline sector reflects optimism about the potential for a more industry-friendly environment under Trump's second term.
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