Airline Stocks Trail Behind the Market; Six out of Top Ten Have Dropped in Value YTD
June 23, 4:02 pm
Although the airline industry aims for a new record with nearly five billion scheduled flights and almost $1 trillion in revenue forecasted in 2024, most airline stocks still trail behind the market.
According to data presented by AltIndex.com, six out of the ten largest airline companies by market cap have seen their stock values drop year-to-date.
Air China and Ryanair are the Biggest Losers, with 19% and 14% Stock Value Drop YTD
Although the global demand for flights is stronger than ever, investors are still concerned about the airline companies` performance, with many losing billions of dollars in stock value over the past months. According to AltIndex data, six out of the ten largest airline companies by market cap have seen their stock values drop year-to-date, and Air China and Ryanair have seen the biggest losses.
Although the world's second-largest airline company by market cap, Ryanair, is very good at generating profits and cash, the geopolitical and industry uncertainties in the outlook over the coming year, including delays to its Boeing 737MAX deliveries, have caused the company's stock price to drop.
In the fiscal year ended March 2024, Ryanair reported its highest-ever net profit of €1.92 billion and its highest-ever passenger count of 184 million, 24% more than in FY2020, the last pre-pandemic year. Ryanair's operating margin improved to 15.3%, the highest since 2018, making it the most profitable among Europe's leading airline groups. However, that didn't stop the company from losing $4.5 billion in stock value year-to-date. In January, Ryanair's market cap amounted to $30.4 billion; last week, it was $25.9 billion, showing a 14% drop in six months.
Air China saw an even bigger decline, with its stock value plunging by 19% year-to-date. Although the company's financial results for 2024 also showed significant growth and recovery from previous years and a notable increase in passenger and cargo traffic, its stock value dropped by $2 billion over the past six months.
Two other major Chinese airline companies, Chinese Southern Airlines and Chinese Eastern Airlines, have also seen their stock values decline, falling by roughly half a billion dollars in the first half of the year. US Southwest Airlines is also on the list of losers, with a $300 million stock value drop year-to-date. Statistics show German Lufthansa's stock value has dropped the most in 2024, plunging by almost 30% year-to-date.
InterGlobe Aviation and Turkish Airlines are the Biggest Winners in the Top 10 Airlines Club
Unlike these six companies, which saw their stock prices drop, Indian InterGlobe Aviation and Turkish Airlines proved to be the best performers in the top ten club.
The parent company of IndiGo reported strong financial results in FY 2024, marking a significant turnaround from the previous year. After ending 2023 with a $370 million loss, InterGlobe Aviation reported a net income of close to one billion dollars in FY 2024 and carried 27.5 million passengers, showing a 23.4% increase. The company's strong financial results helped it grow its stock value by a fantastic 45% in the past six months, the highest increase among the top ten airline companies. Last week, InterGlobe's market cap was close to $20 billion, up from $13.7 billion in January.
Statistics show Turkish Airlines was the second-best performer in the year's first half. The company maintained a robust performance in 2024, with notable growth in passenger numbers, Available Seat Kilometers (ASK), and cargo operations, which caused its stock value to jump by 23% or $2.5 billion since the beginning of the year.
Read more about the best airline stocks.
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