Tailwind for airlines: how to pick the right stock
Airlines from Cathay Pacific to Wizz Air are benefitting from strong travel demand and higher fares, but which ones will benefit from the post-pandemic tailwind most? IGTV’s @AngelineOng investigates.
"The pandemic years are behind us’’
says IATA’s Willie Walsh, and looking at Cathay Pacific’s shares, you’d be inclined to agree.
Cathay Pacific shares soar
Cathay Pacific Airways Ltd hit a 5-month peak, bucking the overall trend for the Hang Seng index, weighed by a hawkish US Federal Reserve and concerns over whether this will snuff out a nascent global recovery.
Hong Kong’s flagship carrier is expecting its first half year profit in three years.
Not only did it benefit form a one-off gain from a stake sale in Air China Ltd, but travel demand is rebounding in a big way.
Global airlines double profit forecast
Global airlines have more than doubled their forecast for the sector’s profit in 2023.
Flagship carriers and budget airlines like Wizz Air Holdings Plc, Ryanair Holdings PLC (LSE) and easyJet PLC are all reporting strong bookings and higher summer fares.
Pick stocks that can ‘cope’
However, it could all turn south, if airlines do not manage this spike in travel demand.
Orders for planes are piling up. IATA says members are complaining of having to wait 6 months or more for a delivery. Airbus Group NV (FR) and Boeing Co (All Sessions) say supply chains are to blame and reiterate there is no quick fix.
So, be picky when choosing airline stocks, look for those that are able to cope with rising travel demand.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
