On April 21, American Airlines released its financial report, stating that it is optimistic about the continued recovery trend. The aviation sector performed well on the same day, continuing its previous gains. Meanwhile, on April 13, US stock Delta Air Lines announced its Q1 earnings report. As performance exceeded market expectations and the optimistic outlook for the second quarter, the aviation sector continued to rebound since mid-March; at the same time, “epidemic recovery” sectors such as cruises, lodging, and hotels have also recently picked up to a certain extent.
According to statistics, the latest closing prices of American Airlines (AAL.US) and United Continental Airlines (UAL.US) have rebounded more than 50% from their lowest point in the year, Delta Air Lines (DAL.US) has rebounded more than 40%, and Southwest Airlines (LUV.US) has rebounded nearly 30%.
On the domestic side, the performance recovery of airlines is weaker than that of overseas aviation giants. They are facing a situation of “internal and external problems”. Internal worries are more disrupted by the epidemic, and external problems are restrictions on overseas travel. However, along with the weakening trend of COVID-19, there are certain expectations of recovery in the tourism industry; at the same time, after the decline in the previous two years, performance risks in the aviation sector have been released, and the sensitivity of negative losses to stock prices has tended to slow down.
However, investing in aviation stocks has never been an easy task; even stock god Buffett has followed suit in aviation stocks. This issue of “Industry Nuggets” will focus on aviation stocks. Follow popular girls to take a look at the investment logic of aviation stocks and discuss whether this wave of positive markets was a “flash in the blink of an eye” or whether it has actually ushered in an inflection point in the industry~
I. Introduction to aviation stocks
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