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Airline stocks to watch in 2022

Airline stocks are the shares of companies that provide air transportation services for passengers and cargo. 2020 was not an easy year for airlines, as the result of the coronavirus pandemic put international travel and the airline industry under enormous strain. However, with the mass distribution of vaccines and industry stimulus packages in several countries, the year 2022 shows hope of revival for the airline industry. Many traders may even see the previous decline of major shares​​ as long-term opportunities.

This article delves into the airline industry and several top airline stocks to watch for 2022, based on market capitalisation and potential growth. Read on and find out how to spread bet and trade CFDs on airline stocks with our award winning* Next Generation trading platform​​.

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Types of airlines

Airlines are categorised into three groups - major airlines, national airlines and regional airlines. The amount of revenue an airline generates defines how it is ranked.

  • Major airlines: This airline group consists of the leading companies in the industry. An annual revenue of more than £1 billion would class an airline in this category. Delta Air Lines, United Airlines and Southwest Airlines are examples of companies ranked as major airlines and also blue-chip stocks​.
  • National airlines: These companies tend to have a smaller fleet than major airlines and generate annual revenues between £100 million and £1 billion. As well as serving their countries’ regions, these airlines may also offer international destinations in its route network.
  • Regional airlines: These airlines service particular regions within a country. This segment of the industry is growing quickly and is separated into three groups. Large Regional airlines operate with aircraft fit for 60 or more passengers and generate an annual revenue between £20 million and £100 million. Medium Regional is a subgroup for airlines with smaller-sized aircraft and an annual revenue of under £20 million. Small Regional airlines are not defined by their revenue, but rather by the fact that they operate aircraft with under 61 seats.

Top airline shares in 2022

Below are some of the top airline stocks based on market capitalisation and potential growth, as of February 2021. These stocks are available to be traded on using our Next Generation trading platform through derivative products such as spread bets and CFDs. In particular, spread betting is a tax-efficient** way of speculating on the price movements of the underlying assets. Open an account to start trading on the below shares and browse our instruments pages for more information and trading details.

Southwest Airlines (LUV​​)

Recognised as one of the world’s most prominent ‘no frills’ airlines, Southwest Airlines was founded in 1967, in America. The Dallas-based company originated as an intrastate airline, flying between Dallas, Houston and San Antonio. It now stands as one of the largest carriers of domestic passengers in the United States. Southwest flies to several countries, to over 100 destinations within the United States, and in 2020, declared plans to expand to further airports. It has over 700 Boeing 737 planes in its fleet, making it one of the largest operators of its kind worldwide.

Delta Air Lines (DAL​​)

Atlanta-based Delta Air Lines is one of the main airlines in the United States. It is a legacy carrier, which means that it established its routes before the establishment of the Airline Deregulation Act in 1978. It operates flights to over 50 countries around the world, spanning six continents. Airbus and Boeing are Delta’s fleet manufacturers and it is also one of America’s highest operators of the Airbus A330. After strongly emerging from bankruptcy in 2007, Delta restructured and went on to acquire Northwest Airlines in 2008, which fully merged and integrated into Delta Air Lines in 2010.

Air China (601111​​)

Air China is a major airline and a member of the ‘Big Three’ airlines in China. In 1987, the Chinese government made the decision to divide the Civil Aviation Administration of China (CAAC Airlines) into individual airlines. Consequently, in 1988, Air China was established, along with five other airlines. It took on the CAAC’s long haul fleet and the reins for intercontinental flights. In 2002, Air China merged with China Southwest Airlines and China National Aviation Holding, and in 2004, it became listed on the London and Hong Kong stock exchanges. Its impressive fleet consists mainly of Boeing and Airbus aircrafts.

Ryanair (RYA​​)

Ryanair Holdings is made up of several airlines, Ryanair DAC being the largest and most prominent, with its success being built upon its low-cost business model. The renowned budget airline was established in Ireland in 1984 and primarily operates in London Stansted and Dublin airports. Since going public in 1997, the airline benefited greatly from the EU Airline Deregulation and it has gone on to become one of the largest budget airlines in Europe. Ryanair flies to a range of countries across Europe, the Middle East and North Africa.

United Airlines (UAL​​)

Headquartered in Illinois, United Airlines is a major airline company in the United States. Due to its impressively large fleet and route network, United Airlines is considered one of the largest airlines in the world. Its route network covers cities across the United States and all six continents. It is also a founding member of the largest airline alliance, the Star Alliance. In 1931, United Air Lines was established as a holding company for several airlines. A merger between United and Continental Airlines resulted in a change of name to United Continental Holdings, which was then changed again, in 2019, to United Airlines Holdings.

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China Southern Airlines (600029​​)

Following a restructure of CAAC Airlines, China Southern Airlines was founded in 1988. It is made up of two main business divisions; the Airline Transportation and Other. Airline Transportation includes passengers, cargo and mail. The Other segment consists of several operations, including hotel and tourism services. It has the largest fleet in Asia and is recognised as one of the world’s largest airlines in terms of carried passengers. In 2019, China Southern Airlines aligned with American Airlines to create a frequent flyer partnership. The company flies to over 190 destinations across the world and proudly promote the slogan ‘Fly into your dreams’.

American Airlines (AAL​​)

American Airlines is a major airline with one of the largest aircraft fleets in the world. It originated in 1924 and was rebranded as American Airlines in 1934. The company went on to expand exponentially, and in 2001, it purchased Trans World Airlines. It merged with US Airways in 2013, resulting in the creation of one of the largest airlines in the world. The airline flies to a vast amount of domestic destinations and countries all over the world across five continents. As of 2019, the airline had almost 130,000 employees, and on an annual basis, it deals with over 200 million passengers.

Singapore Airlines (C6L​​)

Singapore Airlines is recognised worldwide as a major airline and is the flag carrier airline of Singapore. Its origins date back to the formation of Malayan Airways Ltd in 1947, and in 1972, Singapore Airways became established. With a route network of over 90 cities across the world, the company owns a vast fleet, consisting of Boeing and Airbus aircraft. Singapore Airlines’ headquarters are based in Changi Airport in Singapore, and Temasek Holdings and the Singapore government are its majority owners.

Lufthansa (LHA​​)

As one of the founding members of the Star Alliance, Deutsche Lufthansa is the largest German airline. Lufthansa owns a range of aviation companies and several subsidiary airlines. The group’s airline fleet is one of the largest in the world with over 700 aircraft. The long-haul fleet consists of some of the most environmentally friendly aircraft, such as the Boeing 747-8 and the Airbus A380. Since 1966, traders have been investing in its shares on the German stock market, and up until 1994, it was state owned as Germany’s flag carrier. Lufthansa operates flights domestically and to cities across the globe.

Airline ETFs

Exchange-traded funds​ (ETFs) are investment funds that consist of a compilation of assets, such as shares, which aim to track and reflect the performance of popular airline indexes. On our platform, we offer traders the opportunity to trade on an airline ETF named the US Global Jets ETF​​. This tracks the performance of an index that contains popular stocks of US and international airlines, aircraft manufacturers and airports. It enables traders to invest in baskets of stocks indirectly through spread bets and CFDs, without needing to take ownership of the asset.

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Investing in airlines with CMC Markets

There are a few ways to invest in airlines. A traditional way is through buying and selling shares on a local stock exchange. This requires you to pay the full share value upfront, which can be a large sum of money to spend in one transaction.

An alternative method is to trade on margin via CFDs or spread betting, which means that you are only required to place a fraction of the full trade amount, known as a deposit, in order to gain exposure to the share market. Our Next Generation trading platform enables users to invest in stocks this way by trading on the underlying price movements with spread bets and CFDs. Similar to ETF trading, this means that you won't take ownership of the share either when spread betting or trading CFDs on the above airline stocks.

Register for an account now to start trading on some of the top airline stocks. Understanding the risks of trading with derivatives is important, and can be understood further by reading more about leveraged trading.

Summary

In summary, after a turbulent 2020, hope is on the horizon for the airline industry. Some traders may even see this downturn in the industry as an opportunity for long-term investment. You can take advantage of our news and insights​ section to keep track of airline industry news and explore our platform video guides​​ library to learn more about additional platform features.

FAQs:

How can I trade airline stocks?

Trading on airline stocks can be achieved through our Next Generation trading platform as traders can spread bet and trade CFDs on airline stocks, such as Delta Air Lines and Southwest Airlines.

What are some of the top airline stocks to trade on?

Some of the top airline stocks include Delta Air Lines, Southwest Airlines and United Airlines. This is based on 2021 market capitalisation figures. You can spread bet and trade CFDs on these stocks on our Next Generation trading platform.

Can I trade airline ETFs?

You can trade on an airline ETF on our trading platform named the US Global Jets ETF, which enables traders to invest in baskets of airline stocks indirectly through spread bets and CFDs.

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