Keep these airline stocks on your radar screen

Their recent media-fuelled pullback has created an attractive entry point for investors.

Vikram Barhat 19 April, 2017 | 5:00PM

As far as headlines go, this isn't turning out to be a great year for U.S.-based airlines. United Airlines' recent customer-service debacle hogged headlines and triggered a loud public outcry, barely weeks after it found itself dealing with an onslaught of bad press and social-media backlash for barring two teenage girls from boarding the flight for "inappropriate" leggings. Delta Air Lines, America's largest career, is still reeling from a whopping US$125 million loss in revenue due to flight cancellations. There have been lawsuits alleging racial discrimination, frequent flight cancellations and other instances of public relations failures.

However, what is lost in the media maelstrom and worldwide outrage is the quiet resurgence of the U.S. airline industry that has long been battling geopolitical headwinds, low fares forced by weaker oil prices, weather-related cancellations and general economic malaise. Further, the recent sell off in airlines stocks, due to deteriorating unit revenue guidance, tends to mask an otherwise positive and improving 2017 outlook for the airlines, according to a Morningstar report.

The pullback has created an attractive entry point for investors looking to buy airline stocks that appeared slightly overvalued in the past not so distant, says Morningstar equity analyst, Chris Higgins.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
American Airlines Group Inc11.98 USD7.54
Delta Air Lines Inc26.32 USD2.61
United Continental Holdings Inc30.69 USD3.89

About Author

Vikram Barhat

Vikram Barhat  Vikram Barhat is a freelance writer.