Should You Buy Airline Stocks Right Now?

With the current state of the world and the stock market, airline stocks may be very tempting to buy due to the low cost of their stocks. However, some analysts argue that the debt acquired by these airlines during the pandemic will make it hard for them to quickly turn a profit and get out of the hole they are currently in. Others argue that once travel returns to normal the price of airline stocks will jump a good amount.

One thing is for certain, if you are trying to make a quick buck, airline stocks probably aren't for you. On the other hand, if you are willing to wait out the current pandemic to make some money, I see airline stocks as a good investment.

The Argument to Buy

I think the future of airline stocks will be optimistic. According to the Transportation Security Administration (TSA), the number of daily passengers has tripled compared to April's numbers. Also, a stock like United Airlines (NASDAQ:UAl) was trading at about $79 a share in January and is currently at about $35 a share which gives it lots of room to grow as the state of the airline industry increases. Simply eventually returning to where it was at just months ago will mean great returns on your investment.

In addition to the increasing number of passengers and room for growth, as with Norwegian Cruise Line stock, I find human nature as a positive factor. I still believe that once the world goes back to normal and people are able to travel with ease of mind, I believe they will do so. Thus resurgence in travel should have nothing but good effects on the price of airline stocks.

Finally, airline stocks are already showing potential, even as quarantine continues. As I am writing this article, United Airlines (NASDAQ:UAl) is up 14.5% today, American Airlines (NASDAQ:AAL) is up 16%, and Southwest Airlines (NYSE:LUV) is up 7.5%.

The Final Consensus

As I always say, nothing is certain and the market can always surprise you. With that being said, I believe airline stocks have the potential to have great returns once the COVID pandemic is over and things return to normal. Due to the room to grow, an increasing number of passengers, and a large percentage gain in recent days, I am going to rule airline stocks as HIGH VOLTAGE. If you are ready to invest and don't mind waiting for a good return, I recommend checking out the airline stocks referenced in the paragraph above. 

July 15, 2020

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