Image source: Getty Images
In the last four years, airline stocks have been wrestling with multiple headwinds. First, the COVID-19 pandemic brought the travel sector to a screeching halt for two years. Several countries relaxed lockdown measures in 2022, resulting in pent-up travel demand. However, the reopening of economies and COVID-19-related subsidies drove oil prices and inflation significantly higher.
Despite an uptick in sales growth, airline companies were struggling to improve profit margins. Further, to combat inflation, several central banks raised interest rates at an accelerated pace in the last 24 months. The airline sector is capital-intensive, resulting in a further erosion of the bottom line.
Lastly, the ongoing wars between Israel-Hamas and Russia-Ukraine, as well as the fiasco with Boeing’s lineup of 737 Max planes, might impact the airline industry in the near term.
Alternatively, the possibility of multiple…
