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Airline stocks

DavidG

Rookie Investor
Apr 3, 2021
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547
Before this new variant (Delta) a friend at work loaded up on Airline stocks. Obviously thinking these stocks have been hammered and that coming out of lockdown will mean an increase in foot fall. While this became true the new variant hit and went back to square one. Now nicely in the red, as i like to say, what are our opinions on Airline stocks?

Looking at stocks like International Consolidated Airlines Group (IAG), TUI Group (TUI), Easy Jet (EZJ) and possibly Rolls-Royce (RR).

Thinking possibly Rolls-Royce due to them making may plane components. All are looking undervalued with such P/E ratios but do we think its justified at the moment?
 

Ablearcher13

New member
Apr 18, 2021
19
15
322
Hi DavidG

This is a great question. I worked in the travel industry for 30 years. I lost my job last year to COVID as no one was travelling.

I have small investments in IAG, EZJ & JET2. I figure these three for the following reasons,

  1. IAG, British Airways have the majority of slots at London Heathrow, plus their routes cover North America & Caribbean, Asia and Latin America. North America is usually the most profitable route.
  2. EZJ, Easyjet are key placed for the low-cost market, operating out of Luton & Gatwick to name a few airports.
  3. JET2, Customer service during the lockdown in 2020 was excellent. I like these more than TUI, they have retail shops, as I know, can generate big overheads.
Overall, I don't think we will see travel companies back to pre-covid levels for at least 5 years. I am happy to hold but won't put any more money in for a while. Post-Christmas/January was always a peak booking time for holidays, but until COVID settles down, I will be looking elsewhere. Hope this helps.
 
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DavidG

Rookie Investor
Apr 3, 2021
69
19
547
Hi DavidG

This is a great question. I worked in the travel industry for 30 years. I lost my job last year to COVID as no one was travelling.

I have small investments in IAG, EZJ & JET2. I figure these three for the following reasons,

  1. IAG, British Airways have the majority of slots at London Heathrow, plus their routes cover North America & Caribbean, Asia and Latin America. North America is usually the most profitable route.
  2. EZJ, Easyjet are key placed for the low-cost market, operating out of Luton & Gatwick to name a few airports.
  3. JET2, Customer service during the lockdown in 2020 was excellent. I like these more than TUI, they have retail shops, as I know, can generate big overheads.
Overall, I don't think we will see travel companies back to pre-covid levels for at least 5 years. I am happy to hold but won't put any more money in for a while. Post-Christmas/January was always a peak booking time for holidays, but until COVID settles down, I will be looking elsewhere. Hope this helps.
5 Years is a long time, i guess it would be the case of making the position and letting it ride while at discount. 5 years is a long time to wait for a trade to come through. It'll be interesting to see the numbers of bookings. I also wonder if we keep seeing this happen that maybe small players in the game would get costed out and the larger airlines will scoop up the routes? Obviously not nice for those who lose their jobs.
 
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Ablearcher13

New member
Apr 18, 2021
19
15
322
5 Years is a long time, i guess it would be the case of making the position and letting it ride while at discount. 5 years is a long time to wait for a trade to come through. It'll be interesting to see the numbers of bookings. I also wonder if we keep seeing this happen that maybe small players in the game would get costed out and the larger airlines will scoop up the routes? Obviously not nice for those who lose their jobs.
It's a horrible situation for so many people, a lot I know from previous travel roles. Travel is such a volatile sector although there could be more optimism going into 2022, given that people have not had a lot of holidays and breaks for two years.
 

Ardgour

Rookie Investor
Mar 16, 2021
102
111
787
North East Scotland
We don’t have any airline stocks in our portfolio - but we do have Rolls Royce.
With the small nuclear reactors looking likely, I would favour this company over the next 5 years - 10 years
They should also benefit from the recovery in travel however how strong that recovery is anyone’s guess.
Not expecting a dividend though…
 
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Order66

New member
Oct 14, 2021
17
7
212
We don’t have any airline stocks in our portfolio - but we do have Rolls Royce.
With the small nuclear reactors looking likely, I would favour this company over the next 5 years - 10 years
They should also benefit from the recovery in travel however how strong that recovery is anyone’s guess.
Not expecting a dividend though…
Quite excited to see how these mini nuclear reactors turn out and should be good for RR long term, seem more sustainable and reasonable as a energy source.
 
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