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Summary
- Air Canada’s stock (TSX:AC) has gained more than 38 per cent over last one year
- United Airlines’ (NASDAQ:UAL) has gained more than 36 per cent over last one year
- United Airlines has reported return to positive cash flow from March 2021
The pandemic is receding, and people are traveling again. International trade is also picking up on the back of vaccinations. The time is perfect to pick some airlines stocks. The Toronto Stock Exchange (TSX) is also rising with flying colors, and it recently topped the 20,000 landmark. Let’s know more about a couple of airlines stocks, one of which is listed on TSX, to make an informed investment decision.
Air Canada (TSX:AC)
Canada’s largest airline is a well-known across North America. In 2020, Air Canada ranked among world’s 20 largest airlines. Millions of passengers use its service every year. Air Canada also recently provided COVID-19 relief services to India by operating cargo-only flights.
The company can be a promising stock as it is the only carrier in North America to receive four-star ranking, as per UK research firm Skytrax. By 2050, the airline aims to achieve net zero emission target.
Air Canada has a market cap of over C$9 billion, and its price-to-book ratio is 9.97. The stock’s 21-day moving average is 25.84, and 50-day moving average is 25.84.
Due to the negative impact of COVID-19 pandemic on company’s revenues over last one year, Air Canada availed the government liquidity program. It entered into debt and equity financing agreements with the Canadian government in April 2021 to access nearly C$5.9-billion liquidity. In the same month, Air Canada announced refunds to all passengers affected due to flight cancellations in the wake of the pandemic.
For Q1 2021, Air Canada reported operating revenues of C$729 million compared with C$3,722 million for Q1 2020. Operating loss during Q1 2021 was over C$1 billion compared with C$433 million loss in Q1 2020.
The stock has gained more than 38 per cent over last one year, and over 18 per cent on year-to-date basis.
Source: Pixabay
United Airlines Holdings Inc. (NASDAQ:UAL)
United Airlines ranks third in the world in terms of scheduled revenue passenger miles. It operates on domestic and international routes across the US and all other continents.
In May 2021, the company announced adding nearly 400 daily flights to its July month schedule. After the pandemic-induced slowdown in operations, the company reported a 214 per cent rise in bookings for summer travel compared with 2020. To lure people to beat the pandemic blues, it will sell beer, wine and snacks on most flights with travel time of over two hours.
The company has also reported return to positive cash flow from March 2021. For Q1 2021, United incurred net loss of US$1.4 billion. Total operating revenue during this period stood at US$3.2 billion, a 66 per cent decline compared with Q1 2019. It ended Q1 2021 with available liquidity of US$21 billion.
Listed on Nasdaq, the stock of United Airlines has gained more than 36 per cent over last one year, and over 33 per cent on year-to-date basis.
Both the above stocks have returned more than 35 per cent over last one year. As the pandemic recedes and operations surge, both companies will further pare losses.
