Morgan Stanley analyst Ravi Shanker said that International travel has seen a reliable and durable surge, post slowdowns.

Going back to the 1970s, following almost every major economic downturn, U.S. passport issuance has roughly doubled in the 5 years since the end of the downturn and the number of passports issued today is 4x 25 years ago, noted the analyst.

The analyst observed that between 2016 and 2019 the average number of U.S. passports issued per year was over 20.4 million, and in 2022 that number nearly hit 22 million U.S. passports.

He said he would not be surprised if the 2023 issuance number is comfortably a new record, especially given the current International travel boom.

The analyst described the travel boom as a durable growth trend instead of a 'one-and-done' revenge travel spike.

Delta Air Lines Inc (DAL  ) and American Airlines Group Inc (AAL  ) will expand flights to China shortly after flight restrictions are eased.

The U.S. Department of Transportation (DOT) recently announced that passenger flights between the U.S. and China will double in the coming months.

While the analyst is not surprised Delta and American followed United Airlines Holdings Inc's (UAL  ) announcement, United Airlines is likely to be the most aggressive amongst the three Legacies, due to the fact that it is amongst the only airline that is actually profitable on this route.

Since October 2022, Southwest Airlines Company (LUV  ) has ratified numerous contracts with union work groups and they remain committed to continue negotiations.

The analyst will continue to monitor negotiations with the pilot union as we believe it could impact labor cost/wage inflection on LUV's CASMxF.

The analyst said that Frontier Group Holdings Inc (ULCC  ) is impacted by fleet delays, operating challenges, and Domestic air pocket, but stock is cheap enough to wait for 2024 normalization.

Price Action: DAL shares are trading lower by 0.23% at $42.12 on the last check Thursday.