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11 Best Aviation Stocks To Buy According To Analysts

Hamna Asim
11 min read

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In this article, we discuss 11 best aviation stocks to buy according to analysts. If you want to skip our discussion on the aviation industry, head over to 5 Best Aviation Stocks To Buy According To Analysts. 

The International Air Transport Association (IATA) released its outlook for the airline industry in December last year, projecting a higher profitability trajectory for full-year 2023 with further stabilization anticipated in 2024. The overall aviation landscape in 2024 is expected to witness a notable increase in revenues, which will outweigh expenses. Industry revenues are forecasted to reach a historic high of $964 billion, fueled by a growth rate of 7.6%, while expenses are projected to rise at a slightly slower pace of 6.9%. This positive trajectory is expected to strengthen the profitability of the airline sector. Passenger revenues are a significant driver of this growth, anticipated to reach $717 billion in 2024, marking a 12% increase from the previous year.

On the cargo front, revenues are projected to decline to $111 billion in 2024. This decrease is attributed to the impact of increased belly capacity on the passenger side of the business, coupled with stagnation in international trade. IATA listed down several factors that pose both positive and negative risks to the fragile profitability of the aviation industry. Global economic developments, including inflation, low unemployment rates, and demand for travel, are considered positive factors. However, economic strains in regions like China, if not managed properly, could impact global business cycles. Additionally, ongoing conflicts, such as the Ukraine war and the Israel-Hamas war, have operational and cost implications for the industry, particularly in terms of oil prices.

Willie Walsh, IATA’s Director General, commented: 

“Considering the major losses of recent years, the $25.7 billion net profit expected in 2024 is a tribute to aviation’s resilience. People love to travel and that has helped airlines to come roaring back to pre-pandemic levels of connectivity. The speed of the recovery has been extraordinary; yet it also appears that the pandemic has cost aviation about four years of growth. From 2024 the outlook indicates that we can expect more normal growth patterns for both passenger and cargo. Industry profits must be put into proper perspective. While the recovery is impressive, a net profit margin of 2.7% is far below what investors in almost any other industry would accept. Of course, many airlines are doing better than that average, and many are struggling. But there is something to be learned from the fact that, on average airlines will retain just $5.45 for every passenger carried. That’s about enough to buy a basic ‘grande latte’ at a London Starbucks. But it is far too little to build a future that is resilient to shocks for a critical global industry on which 3.5% of GDP depends and from which 3.05 million people directly earn their livelihoods. Airlines will always compete ferociously for their customers, but they remain far too burdened by onerous regulation, fragmentation, high infrastructure costs and a supply chain populated with oligopolies.”

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