Airline share prices ended 2021 slightly down on the same point 12 months ago after a year characterised by dashed hopes, as the Covid-19 pandemic continued to play havoc with the travel industry.

FlightGlobal analysis of data for 18 of the largest airline groups – covering Asia-Pacific, Europe and North America – shows indexed share prices in the last week of 2021 at -4.9, where prices for the week-commencing 28 December 2020 were 0. Prices peaked at +19 in mid-March 2021 and hit a low point of -9.2 in late November.

Looking over a five-year period, the story is not much better. Indexed with prices at the end of 2016, end-2021 prices are at -2.3. On the same basis, prices on the eve of the Covid-19 pandemic in January 2020 were at +50.9. The five-year peak was +70.1 in March 2018.

Those trends reflect another turbulent year for the airline industry, even as share prices settled at a higher level overall compared with those seen in 2020.

After a standing start, early 2021 hopes around the impact of vaccination programmes on the reopening of borders prompted share prices to peak in March. North American carriers were strong performers during this period, as their domestic markets came back strongly.

The rise of the more-transmissible Delta variant of Covid-19, however, meant the northern hemisphere summer travel season was slow to start and disappointing – compared with pre-Delta expectations – when it arrived, as governments continued to enforce travel restrictions.

Disappointment was keenly felt by European carriers, while the reopening of the huge Asia-Pacific market to international travel was pushed back further.

Some optimism returned to markets in late summer, as vaccines held up against the Delta variant and governments grew more confident when it came to relaxing travel restrictions – notably those in Europe, who began to accept fully vaccinated visitors. Those developments brought hopes of a prolonged summer travel season, a decent winter holiday period and buoyant summer 2022 bookings for some markets.

Share price dilutions from EasyJet and Lufthansa Group offset some of the positive moves around that time, as did a recognition among US carriers that the Delta variant was disrupting their recovery.

Despite positive signals in some markets, the badly bruised airline industry was ultimately entering the northern hemisphere winter with a limited liquidy boost from the summer, for the second year in a row.

Then, in November, came a timely development for network carriers in particular, as the USA reopened its borders to non-essential international travellers, signalling the return of the crucial transatlantic market. 

Alas, any jubilation was short-lived, as the detection of the highly transmissible Omicron variant of Covid-19 in late November put the brakes on recovery hopes again, including among the Asia-Pacific markets that had finally begun to reopen to international travel.

Encouraging data around Omicron’s ability to cause serious disease gave airlines reasons for optimism going into 2022, but with much of the world still in the early stages of their first wave of the variant, markets are in wait-and-see mode.