Investing in airlines

Is investing in airlines on your radar right now? This guide explains how you can go about it.

Updated

Fact checked

The global airline industry has been one of the sectors most affected by the coronavirus pandemic, with flights to and from some countries grounded completely. Various carriers have halted up to 80% of their flights, and many are offering customers the opportunity to postpone their bookings until later in the year.

Unsurprisingly, share prices in airlines have been tumbling since the beginning of the year. Analysts are split on when the markets will ultimately hit bottom, but some investors are seeing these falls as an opportunity to snap up stock.

Buying airline stocks

Perhaps the most obvious way to invest in this sector is to buy shares in individual airlines (or their parent companies). When buying stocks, investors traditionally look at the current financial results of a company, whether they are paying any dividends to shareholders, and what the firm’s future stock market performance might be.

But with airlines, other factors to consider include passenger numbers, the proportion of flights they are operating where all the seats have been sold, and the cost of fuel – one of the big expenses for airlines.

In these unpredictable times, the balance sheet for most carriers is not necessarily going to be looking too healthy. And with passenger numbers at historic lows, metrics around traveller numbers could be hard to gauge.

So while share prices may look attractively cheap, one of the most important considerations will be whether the airline you are considering investing in is in a strong enough position to weather the current coronavirus storm. Would-be investors would not want to purchase bargain shares in an airline that could potentially fold later this year as a result of the pandemic.

Compare brokers to buy airline stocks

Investing in airline ETFs

ETFs – or exchange traded funds – are another investment option worth considering. In simple terms, ETFs are funds which own and “track” a variety of assets, including stocks in various companies. Buying into an ETF means you do not have to purchase individual shares in different companies yourself. More general information on this type of fund can be found in Finder’s guide to ETFs.

Currently, the US Global Jets ETF (known as JETS) is the only ETF that exclusively tracks airlines stocks. But other larger funds, and ones which focus on the transport sector for example, will also include airline stocks.

Compare brokers to invest in airline ETFs

How to buy airline stocks

  1. Choose a share-dealing platform. Don’t worry if you’re a beginner, our table below will help you pick the right one for you.
  2. Open your account. You’ll need a passport or ID and your bank details. Usually, you’ll be asked to enter your name, email, date of birth, address, national insurance number and employment status.
  3. Confirm your payment details. You’ll need to fund your account with a bank transfer, debit card or credit card.
  4. Find the shares you want to buy. Search the platform you’ve chosen and buy your shares. It’s that simple.

Compare these providers to invest in airlines

Table: sorted by promoted deals first
Data indicated here is updated regularly
Name Product Price per trade Frequent trader rate Platform fees Brand description
Fineco
£2.95
£2.95
Zero platform fee
Fineco Bank is good for share traders and investors looking for a complete platform and wide offer. Your first 50 trades are free with Fineco, until 30/09/2020. T&Cs apply. Capital at risk.
IG
0% commission on US shares, and £3 on UK shares
From £5
£0 - £24 per quarter
IG is good for experienced traders, and offers learning resources for beginners, all with wide access to shares, ETFs and funds. Capital at risk.
Hargreaves Lansdown Fund and Share Account
£11.95
£5.95
No fees
Hargreaves Lansdown is the UK's number one platform for private investors, with the depth of features you'd expect from an established platform. Capital at risk.
eToro Free Stocks
0% commission, no markup, no ticket fee, no management fee
N/A
Withdrawal fee & GDP to USD deposit conversion
Capital at risk. 0% commission but other fees may apply.
Interactive Investor
From £7.99 on the Investor Service Plan
From £7.99 on the Investor Service Plan
No transfer fees or exit fees. £9.99 a month on the Investor Service Plan
Interactive Investor offers everything most investors need. Its flat fees makes it pricey for small portfolios, but cheap for big ones. Capital at risk.
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Data indicated here is updated regularly
Name Product Minimum deposit Maximum annual fee Price per trade Brand description
Moneyfarm stocks and shares ISA
£1500
0.75%
£0
Hargreaves Lansdown stocks and shares ISA
£100
0.45%
£11.95
Hargreaves Lansdown is the UK's biggest wealth manager. It's got everything you'll need, from beginners to experienced investors. Capital at risk.
Interactive Investor stocks and shares ISA
Any lump sum or £25 a month
£119.88
£7.99
Interactive Investor offers everything most investors need. Its flat fees makes it pricey for small portfolios, but cheap for big ones. Capital at risk.
Saxo Markets stocks and shares ISA
No minimum deposit requirement
0.12%
£8.00
Saxo Markets offers a wide access to a range of stocks, ETFs and funds. Capital at risk.
AJ Bell stocks and shares ISA
£500
0.25%
£9.95
AJ Bell is a good all-rounder for people who to choose between shares, funds, ISAs and pensions. Capital at risk.
Fidelity stocks and shares ISA
£1000 or a regular savings plan from £50
0.35%
£10.00
Fidelity is another good all-rounder, offering a good package at a decent price. Not suited for trading shares. Capital at risk.
Nutmeg stocks and shares ISA
£100
0.75%
£0
Nutmeg offers three types of portfolios. Choose the one that goes with your investment style. Capital at risk.
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Data indicated here is updated regularly
Name Product Minimum investment Choose from Annual fee Brand description
Moneyfarm Pension
£1,500 (initial investment)
7 funds
0.35%-0.75%
Moneyfarm has pensions that are matched against your risk appetite, goals and planned retirement date. Capital at risk.
PensionBee Pension
No minimum
7 funds
0.5% - 0.95%
Pension Bee is a newbie in the pension market. It helps consolidate your pension plans into one place. Capital at risk.
Hargreaves Lansdown Pension
£100 or £25 a month
2,500 funds
0-0.45%
Hargreaves Lansdown is the UK's biggest wealth manager. It's got three different retirement options. Capital at risk.
Interactive Investor Pension
Any lump sum or £25 a month
Over 3,000 funds
£10/month
interactive investor is a flat-fee platform, which makes it cost effective for larger portfolios. Capital at risk.
Saxo Markets Pension
Saxo Markets Pension
£10
Over 11,000 funds
No annual fee
Saxo Markets gives flexibility and control over your investment strategy. Capital at risk.
AJ Bell Pension
£1,000
Over 2,000 funds
0.05-0.25%
AJ Bell has two different pension options, a self managed pension and one that is managed for you. Capital at risk.
Moneybox Pension
£1
3 funds
0.15% - 0.45% charged monthly
Manage your money with an easy-to-use Moneybox app. Capital at risk.
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All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Capital is at risk.

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