Post-pandemic, the aviation sector is seeing a massive boost in popularity, with travelers around the world seeking to make up for the lost time. Each airline offers a different twist, but not all are priced right or show as much growth potential as the three listed here.
Below are three stocks that I expect to take flight in the second half of the 2024 fiscal year and beyond. These airlines bring proven histories of solid fundamentals supporting large, successful fleets that rank some of them among the largest in the world.
If you are looking to capitalize on the current boom in air travel and want to find stocks trading at exceptional prices, look no further. Though there are still industry-related setbacks, these airlines offer the potential to give investors hope for this year’s outlook.
Delta Air Lines (DAL)
Delta Air Lines (NYSE:DAL) is a well-known brand in the aviation sector. With a 100-year history, it is one of the most established brands in the aviation industry. Delta recorded a record-breaking year in 2023, with revenue of $54.7 billion, showing a 20% increase from the previous year. Delta came out strong post-pandemic and is enjoying a full recovery after airlines took a major hit.
In addition, investors will be happy to know the recent controversy and attention surrounding Boeing (NYSE:BA) aircraft has little effect on Delta. The 737 Max aircraft manufactured by Boeing that is in question makes up a minimal amount of Delta’s fleet. Delta’s primary manufacturer is Airbus (OTCMKTS:EADSY), which is unaffected by the controversy, meaning no groundings and no slowdowns in revenue.
Delta also goes beyond just flights and, partnering with American Express (NYSE:AXP), offers credit cards that go hand-in-hand with its loyalty program. Delta earned nearly $7 billion in profits from these cards and only plans to continue growing this portion.
On top of these great indicators on the business side, Delta stock is trading at a low price. With its projections for 2024, it seems set to continue its growth trajectory.
United Airlines (UAL)
United Airlines (NYSE:UAL) is another airline that has showcased its ability to overcome and sustain marginal results. UAL stock is trading around $40, and the company is expected to earn anywhere from $9 to $11 per share in 2024. That’s well above analysts’ predictions of $9.58.
The low price reflects some troubles affecting United Air Lines, including labor shortages and struggles to meet demand. However, United rests on a solid foundation and, in its most recent earnings report, showcased a year-over-year revenue growth of more than 50%.
In addition, United Airlines has one of the largest fleets in the aviation industry and plans to expand its reach with more than 140 new planes in 2024.
Given United’s troubles, it could be easy to turn away from this stock. But with grand plans for growth and unexpectedly positive revenue, this stock is set to fly higher than you may think.
Ryanair (RYAAY)
Ryanair (NASDAQ:RYAAY) is an airline serving passengers throughout Europe, offering a slightly atypical short-distance, high-volume service. It has a smaller fleet than larger airlines but also a higher quantity of flights at a given time. The company boasted an all-time high of almost 169 million passengers in 2023.
With the impressive volume Ryanair has already shown us last year, investors can be confident they will continue to respond to the high demand facing the industry.
In addition to the incredible feats of quantity Ryanair has already achieved, it is currently riding a trend of traffic growth in the first half of fiscal 2024. Ryanair is expected to reach 9% growth in its fiscal year to March 2024, leading its expected passengers this year to hit a record 183.5 million.
With each passenger also comes an increasing load factor at Ryanair, where the company reported an increase of 95%. Typical load factors are between 72.5% and 78.9%, with anything over 90% signaling a very profitable year.
For investors, the jumps in profit, growth and load factor make Ryanair an exciting prospect for this year. And with more plans to expand, there is no better time to buy this stock.
On the date of publication, Joel Lim did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
