Are These The Top Airline Stocks To Watch Right Now?
While investors are cautiously evaluating the most volatile stocks in the stock market today, airline stocks could be in focus. They may not post massive gains like meme stocks, but some would argue that airline stocks could take off now. After all, airline operators are, understandably, well-positioned to benefit from the reopening trade momentum now. This would especially be the case with the return of commercial air travel. For the most part, this is thanks to nationwide vaccination efforts and the return of in-person entertainment businesses. By extension, this would lead to an influx of flyers which could mark great news for airline companies and investors alike.
With the current positive sentiment from investors, airline stocks, in general, appear to be gunning for their pre-pandemic levels. For instance, we could look at the likes of Alaska Air (NYSE: ALK) and American Airlines Group Inc. (NASDAQ: AAL) to see this. Adding to that, airline companies also appear to be hard at work bolstering their services, anticipating better times ahead. On one hand, Alaska Air is looking to more than triple its available flights from the Paine Field-Snohomish County Airport by next year. On the other hand, American Airlines continues to expand its flight options, inaugurating its second route to Israel. Over the weekend, the company revealed that it plans to serve the route three times per week.
By and large, I can understand the appeal of top airline stocks now. With pandemic conditions projected to gradually continue improving, more investors could be looking for points of entry into the industry. If you are among said investors, here are three to consider in the stock market this week.
Top Airline Stocks To Watch In June 2021
- Delta Air Lines Inc. (NYSE: DAL)
- Southwest Airlines Company (NYSE: LUV)
- Spirit Airlines Inc. (NYSE: SAVE)
Delta Air Lines
Starting us off today is Delta Air Lines. The Georgia-based airline operator is one of the major airlines in the U.S. today. In brief, it is a global leader in the industry when it comes to air travel services. For a sense of scale, the company runs over 5,000 daily departures and more than 15,000 affiliated departures through alliances. Through its fleet, Delta boasts a massive global network consisting of over 300 destinations in over 50 countries. According to Delta, the company served nearly 200 million people on an annual basis before the pandemic hit. Could all this make DAL stock a top airline stock now?
For one thing, Delta appears serious about conforming to post-pandemic era practices. The company will require new employees to be fully vaccinated before joining the Delta team moving forward. Aside from that, CEO Ed Bastian also strongly encourages the company’s existing 75,000 employees to do the same. Should some employees opt out, Bastian mentioned work restrictions being put in place. This would bring an additional layer of assurance to consumers looking to fly in a post-coronavirus environment.
Moreover, Bastian also appears to have a positive outlook on the industry now. Last week, the Delta CEO predicted that business travel will be booming in September. He cited the awaited return of corporate America as well as physical businesses reopening as key factors to consider here. With this and the continued demand for Delta’s leisure bookings this summer, could DAL stock be a top buy for you now?
Following that, we have the Southwest Airlines Company. For some context, Southwest, like our previous entry, is yet another major player in the U.S. airline market now. As it stands, the company’s current portfolio consists of flights to 115 destinations across the U.S. and ten additional countries. Primarily, Southwest is a go-to for U.S. consumers looking to travel domestically now. Given the current rate of inoculation locally, this could create a perfect storm for LUV stock this year. Even now, the company’s shares are already looking at year-to-date gains of 30%.
Not to mention, Southwest continues to make the most out of its current leading position in the industry as well. Earlier last week, the company launched its “Wanna Get Away Day” in celebration of its 50th anniversary. On June 18, the company will be commemorating its first commercial flight by rewarding potential flyers. According to Southwest, it will be offering over 50 million bonus points, gift cards, and Companion Passes throughout this month. If anything, all this would incentivize consumer spending during the current summer travel season, marking a strategic play by Southwest.
Furthermore, the company is also currently looking to expand its workforce while recalling employees on temporary leave. Based on a report from CNBC, the company is also reaching out to eager candidates with conditional job offers before the pandemic. All in all, it seems like the company is kicking into high gear as it anticipates a busy quarter ahead. Would you say that all this makes LUV stock worth investing in now?
Spirit Airlines Inc.
Another top airline player to know now would be Spirit Airlines Inc. For the uninitiated, the Florida-based company identifies as an ultra-low-cost carrier. Regarding its destination portfolio, Spirit Airlines offers affordable flights throughout the U.S., Caribbean, and Latin America. Now, consumers are likely eager to spend their discretionary funds on leisure and travel. Given the company’s low-cost offerings, consumers who fly with Spirit Airlines would be able to spend more elsewhere. In turn, this would cater to the needs of more thrifty travelers which benefits Spirit Airlines nonetheless. Because of this, I could see investors eyeing SAVE stock right now.
Meanwhile, the company continues to expand its current offerings as well. Late last month, Spirit Airlines added six routes to its two newest destinations in its latest network update. According to VP of network planning, John Kirby, this would mainly serve to accommodate a market that is “already outperforming expectations“. Kirby cited Spirit Airlines seeing positive advance bookings figures as a key growth driver moving forward, suggesting further route additions. With demand for its services on the rise, I can understand if investors are keen on the company’s shares now.
On the financial front, Spirit Airlines appears to be on the uptrend as well. Back in April, the company reported a total revenue of $461.28 million for the quarter. Additionally, it also ended the quarter with over $1.77 billion in cash on hand, marking a 125% year-over-year surge. In closing, CEO Ted Christie had this to say, “While acknowledging that the recovery is still in progress and may not be linear, we continue to believe we will be among the first U.S. carriers to reach sustained profitability.” Given all of this, will you be adding SAVE stock to your portfolio this week?