Throughout the course of the pandemic, travel restrictions have caused many airlines to see a drastic decline in their stock performance. Recently fuel restrictions and interest rates have also contributed more pressure on the industry.
Air Canada (TSX: AC) has been sitting at around $25 a share. Despite the almost 50% decrease from the beginning of 2020, the airline is expecting to see a rebound by the end of the summer as most Canadians will have their second vaccination dose and be looking to travel as soon as they can.
Cargojet (TSX: CJT) is one of the few companies that saw impressive growth during the pandemic as e-commerce drove most of their business. The company also plans to continue growing as their recent partnership with Amazon has been helping facilitate funds. Cargojet shares went up 25% over the last year but have been experiencing some stagnation. This is a great opportunity for investors to jump in on before the stocks jump again.
Bombardier (TSX: BBD.B) has performed well over 2020, seeing 18% increase in jet revenues YTD and expected to see even more growth once travel is back to normal. The stock is up 113% and has plenty of near-term growth potential for investors.
Airline companies have slowly been rebounding as the end of restrictions and lockdowns are on the horizon. As more people are receiving their second vaccination dose, talks of vaccination passports have companies hoping to see a boom in airline travel by the end of the year but we are still in the early stages of recovery.
The Motley Fool reported that at the beginning of the week, “shares of American Airlines Group (NASDAQ: ALL), United Airlines Holdings (NASDAQ: UAL) and Spirit Airlines (NYSE: SAVE) led the way with 5% declines, and shares of Delta Air Lines (NYSE: DAL), Southwest Airlines (NYSE: LUV), and JetBlue Airways (NASDAQ: JBLU) were all down 4% or more.”
Wall Street expressed some concern about inflation in the US as the Bank of America reported that there were talks of inflation increasing 800% from a year ago on quarterly earnings calls and reports; “inflation could lead to the Federal Reserve raising rates faster than expected, which would be bad news for airline balance sheets.”
Airlines are looking to regain some stability in the long-term but the short-term trajectory of industry stocks is looking to see bullish tendencies so investors must be weary of airline stocks and anticipate risky market performances across the board in the coming weeks.
By Surina Nath