Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

3 Airline Stocks That Are Taking Off

By MarketBeat.com (Sean Sechler )Stock MarketsMar 16, 2021 06:35AM ET
www.investing.com/analysis/3-airline-stocks-that-are-taking-off-200567513
3 Airline Stocks That Are Taking Off
By MarketBeat.com (Sean Sechler )   |  Mar 16, 2021 06:35AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Are you planning to travel by air in the coming months? You wouldn’t be the only person hitting the skies, as more and more Americans are getting vaccinated and starting to feel comfortable with air travel again.

TSA officers screened over 1.3 million passengers last Friday, marking the highest number of passengers in a single day since last March. While the major airline companies have all had a tough time dealing with the impacts of the pandemic, it seems possible that they are turning the corner.

Given the renewed optimism surrounding the travel industry and airline traffic volumes, many of the airline stocks are rallying to levels not seen in over a year.

The important thing to note about airline stocks is that most of them are still trading well below their pre-pandemic price levels. That could mean that even more upside is in store for investors that are looking to book a ticket on the ride up.

While there are plenty of challenges for these airline companies to overcome, the recent stimulus package and increasing volume of travelers are both signs that perhaps the worst is over. Fasten your seatbelts as we take a look at 3 airline stocks that are taking off.

1. United Airlines

One of the most important things to consider when you look at the airline stocks right now is whether or not you believe that global air travel will experience a permanent demand reduction, or if you believe that the reduction in volume is only temporary.

If you find yourself falling under the latter camp, United Airlines (NASDAQ:UAL) is worth a look at this time. Back in 2019, before the pandemic, this company was operating more than 4,900 flights per day to 362 airports all over the world.

It’s the most internationally oriented of all of the U.S. airline companies, which could be a good thing as countries around the world start to fully reopen their borders. The company is also partnered up with Chase (NYSE:JPM) for a frequent flier program, which might be a nice growth driver over the long-term.

United has been forced to cut its operating costs considerably, given the dramatic reduction in passenger revenue last year. This is a good thing in our view, as it can help to minimize liquidity risk until things start to get back to normal and provide potential earnings surprises if air travel demand recovers quicker than anticipated.

United Airlines saw its operating costs drop 42% year-over-year in Q4, thanks to workforce reductions and lower fuel consumption. While United Airlines will likely report losses for the majority of this year and has a lot of debt on its books, the thing to remember is that the company’s profitability could return sooner than you think given pent-up travel demand.

The stock is up 46% year-to-date and has been one of the best performing airline stocks so far this year.

2. Delta Airlines

Next up is Delta Airlines (NYSE:DAL), another major U.S. airline that was operating roughly 5,000 daily flights in more than 50 countries back in 2019. Perhaps the best-quality airline stock out there, Delta Airlines has already rebounded significantly off of its March lows and is up over 31% year-to-date.

It’s important to remember that airline stocks can still expose investors to significant volatility, which means that owning the highest-quality names like Delta might be better for people who are willing to slightly limit their upside in exchange for a little less risk. Delta is a cut above many of the other airlines due to its strong financial position.

The company has one of the most conservative balance sheets and the highest operating cash flow per plane in the industry, both strong selling points to consider at this time.

Delta is also poised to report positive free cash flow as early as the second half of 2021, which would be truly impressive given the current state of affairs in the airline industry. Many of the other airline companies are highly levered with aggressive purchase commitments that will probably keep them from reporting positive free cash flow for many years to come.

Additionally, Delta recently announced that it has experienced a 30% daily net sales improvement over February as of Mar. 15. This is a good sign that leisure travel is coming back and bodes well for both Delta and the airline industry as a whole.

3. US Global Jets ETF

If you are finding it difficult to commit to a single airline stock, especially given the fact that they are all rallying at this time, perhaps the US Global Jets ETF (NYSE:JETS) is the right choice for you.

This ETF tracks exchange-listed common stock of U.S. and international passenger airlines, aircraft manufacturers, airports, and terminal services companies. It’s a nice pick if you just want to gain exposure to the overall industry and can help you limit your risk exposure to any single company.

With top holdings including American Airlines (NASDAQ:AAL), Southwest Airlines (NYSE:LUV), and Delta along with exposure to aerospace and defense company General Dynamics (NYSE:GD), this ETF is certainly an interesting option for investors to consider.

The US Global Jets ETF is up over 33% year-to-date.

Original Post

3 Airline Stocks That Are Taking Off
 

Related Articles

3 Airline Stocks That Are Taking Off

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email