Tentative signs of the opening of international air travel markets this summer and the sealing of stabilisation measures have coincided with a June uplift in airline share prices, a development which might have hard-hit carriers hoping the worst is over.
Airline share prices dived across markets as the coronavirus pandemic brought international passenger services to a virtual standstill and raised questions over the viability of even some of the strongest performers.
Companies took a string of measures to reduce costs and conserve cash as the crisis hit, whilst also working to boost liquidity – either through private arrangements or state support schemes, including some high-profile bailouts.
As countries have, albeit at different rates, begun to get the outbreak under some measure of control, attention has turned to the gradual restoration of international air travel services.
A combination of these factors has driven some fresh interest in beleaguered airline stocks. While share prices remain firmly negative year to date, prices begin climbing in June from floors hit during the crisis.
Americas
The crisis had by early May seen renowned investor Warren Buffett’s Berkshire Hathaway dump stakes in four major US carriers – American Airlines, Delta Air Lines, United Airlines Holdings and Southwest Airlines.
Improved financial performance after the 2000s financial crisis had prompted Buffett to begin investing in US carriers in 2016.
“The value of certain things have decreased,” he told shareholders on 2 May. “Our airline position was a mistake. Berkshire is worth less today because I took that position than if I hadn’t.”
While share prices for those four carriers continued to languish in May, a brighter picture has emerged in June. All four carriers have seen a jump in their share price so far – though all remain significantly below start-of-year levels.
| Company | Ticker | Stock market | Currency | 02-Jan-20 | 08-Jun-20 | Change | High | Date | Low | Date |
|---|---|---|---|---|---|---|---|---|---|---|
| LATAM Airlines Group | LTM | NYSE | $ | 10.5 | 2.9 | -72% | 10.5 | 02-Jan | 1.1 | 28-May |
| Air Canada | AC | Toronto | C$ | 50 | 23.4 | -53% | 52.1 | 13-Jan | 12.2 | 19-Mar |
| United Airlines | UAL | Nasdaq | $ | 89.7 | 48.7 | -46% | 89.7 | 02-Jan | 19.9 | 15-May |
| Delta Air Lines | DAL | Nasdaq | $ | 59 | 37 | -37% | 62 | 17-Jan | 19.9 | 15-May |
| Gol | GOLL4 | B3 | BRL | 37.2 | 24 | -35% | 39.1 | 23-Jan | 5.6 | 18-Mar |
| American Airlines | AAL | Nasdaq | $ | 29.1 | 20.3 | -30% | 30.5 | 12-Feb | 9 | 15-May |
| Southwest Airlines | LUV | NYSE | $ | 54.8 | 40.6 | -26% | 58.5 | 13-Feb | 23.9 | 15-May |
| JetBlue | JBLU | Nasdaq | $ | 18.9 | 15.6 | -17% | 21.6 | 13-Feb | 6.9 | 23-Mar |
| FlightGlobal analysis; all figures are for opening/close of day and do not account for wider trading fluctuations | ||||||||||
In Latin America, the region’s two biggest operators Avianca and LATAM Airlines Group have both been forced into formal restructuring. That is reflected in LATAM’s share price, down 72% on start of the year levels.
Europe
In Europe, while business model has been no guarantee of share performance, low-cost operators Ryanair and Wizz have seen their share prices close the gap more than the region’s biggest operators.
While Ryanair’s share price halved from its January peak to a mid-March low, its share price opened on 9 June only 19% down on its year-beginning price. Likewise, Wizz is only 13% down on its start of the year price.
| Company | Ticker | Stock market | Currency | 02-Jan-20 | 09-Jun-20 | Change | High | Date | Low | Date |
|---|---|---|---|---|---|---|---|---|---|---|
| Wizz Air | WIZZ | London | £ | 4 | 3.5 | -13% | 4.5 | 12-Feb | 2 | 19-Mar |
| Ryanair | RYA | London | € | 14.9 | 12.1 | -19% | 1610 | 10-Jan | 8.1 | 18-Mar |
| Lufthansa | LHA | Frankfurt | € | 16.7 | 11.5 | -31% | 16.7 | 02-Jan | 7.4 | 24-Apr |
| SAS | SAS | Stockholm | SKr | 15.6 | 9.7 | -38% | 16.4 | 09-Jan | 8.1 | 16-Apr |
| EasyJet | EZJ | London | £ | 1430 | 830 | -42% | 1552 | 11-Feb | 475 | 03-Apr |
| Air France-KLM | AF | Paris | € | 10.3 | 5.4 | -48% | 10.3 | 02-Jan | 3.6 | 22-May |
| IAG | IAG | London | £ | 636 | 308 | -52% | 671 | 17-Jan | 168 | 14-May |
| Norwegian* | NAS | Oslo | NKr | 40.9 | 4.4 | -89% | 43 | 09-Jan | 2.6 | 20-May |
| FlightGlobal analysis; all figures are for opening/close of day and do not account for wider trading fluctuations, Norwegian price on 8 June; | ||||||||||
But share prices are further down at two other major European low-cost operators, EasyJet and Norwegian. The former has dealt with high-profile unrest from founder and shareholder Stelios Haji-Ioannou, whilst troubled Norwegian pushed through a major financial debt restructuring under which its aircraft lessors have taken sizeable holdings in the airline.
Asia-Pacific
Carriers in the Asia-Pacific region were the first to be hit by the coronavirus outbreak and the start of the year turned out to be as good as it has got for many shares prices in the region.
| Company | Stock market | Currency | 02-Jan-20 | 08-Jun-20 | Change | High | Date | Low | Date |
|---|---|---|---|---|---|---|---|---|---|
| AirAsia | Kuala Lumpur | MYR | 1.7 | 1.1 | -35% | 1.7 | 13-Jan | 0.5 | 19-Mar |
| Qantas | Sydney | A$ | 7.2 | 4.9 | -32% | 7.2 | 02-Jan | 2.1 | 19-Mar |
| Air China | Shanghai | CNY | 9.8 | 7.3 | -26% | 9.8 | 02-Jan | 6.3 | 25-May |
| Cathay Pacific | Hong Kong | HK$ | 11.4 | 8.8 | -23% | 11.4 | 02-Jan | 7.7 | 23-Mar |
| China Southern | Shanghai | CNY | 7.3 | 5.7 | -22% | 7.3 | 02-Jan | 5.0 | 25-May |
| China Eastern | Shanghai | CNY | 5.9 | 4.7 | -20% | 5.9 | 02-Jan | 4.0 | 23-Mar |
| ANA | Tokyo | JPY | 3.5 | 2.8 | -20% | 3.7 | 20-Jan | 2.1 | 07-May |
| Singapore Airlines | Singapore | S$ | 3.5 | 4.3 | 23% | 4.4 | 08-May | 2.0 | 23-Mar |
| FlightGlobal analysis; all figures are for opening/close of day and do not account for wider trading fluctuations | |||||||||
Again carriers in the region have in June started to see an uptick in share prices.
Singapore Airlines share price has had a volatile period since May. Having seen its share price slide over the first four months of the year, it jumped sharply in early May ahead of a planned rights issue. The price fell again ahead of publishing that it slipped to a net loss in 2019, before climbing again in June.
