Investing in airlines

We've compiled the ways that you can invest in airlines if its on your radar right now

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 airlines have halted their flights, and the latest developments with coronavirus mean that it’s still risky to travel. Many countries have closed their borders to UK travellers due to the new variant of the virus.

Unsurprisingly, share prices in airlines have been tumbling since the beginning of 2020. Analysts are split on when the markets will ultimately hit its floor, but some investors are seeing these falls as an opportunity to snap up stock. Find out more about investing in airlines. find out about airline ETFs and compare brokers to invest in airlines.

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.

Bottom line

Airline stocks might not be sky high right now – but with coronavirus numbers coming down and vaccine’s being administered worldwide, we can expect that we’ll be able to jet off on holiday soon – which could impact stock prices. Make sure you’re aware of the risks involved and that you do your research on individual airline stocks before you invest. If you want a diversified range of stocks then airline ETFs could be a good option for you.

Compare these providers to invest in airlines

Table: sorted by promoted deals first
Name Product Price per trade Frequent trader rate Platform fees Brand description
eToro Free Stocks
£0
N/A
£0
Capital at risk. 0% commission but other fees may apply. The minimum deposit with eToro is $50.
Hargreaves Lansdown Fund and Share Account
£11.95
£5.95
£0
Hargreaves Lansdown is the UK's number one platform for private investors, with the depth of features you'd expect from an established platform. The minimum deposit with HL is £1. Capital at risk.
Freetrade
Finder Award
Freetrade
£0
N/A
£0
Claim your free share worth between £3 and £200. Capital at risk.
Degiro Share Dealing
UK: £1.75 + 0.014% (max £5)
US: €0.50 + $0.004 per share
N/A
£0
Degiro is widely seen as one of the best low-cost share brokers, for people who are looking to trade regularly. The minimum deposit with Degiro is £0. Capital at risk.
interactive investor Trading Account
£7.99 (with one free trade per month)
£0
£9.99 per month
Interactive Investor offers everything most investors need. Its flat fees makes it pricey for small portfolios, but cheap for big ones. The minimum deposit with ii is £0. Capital at risk.
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Compare up to 4 providers

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. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.

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