I have been getting flooded with questions about the airlines and here is my opinion on them.
Furthermore, here are my recommendations if you really do want to get into airlines.
Read below for the breakdown!
Airlines went on a massive run off the lows several weeks ago but recently the rally has faded and the airlines are truly struggling.
Airlines like $AAL priced $2.5 billion bonds, creating even more debt for themselves, or $DAL raising the size of their debt sale to $6.8 billion tonight.
At the end of the day, airline travel is down significantly and the rise in COVID numbers will cause flights to be dropped again.
Not only that but the cash burn is insane and airlines like $AAL were burning $70 million a day as of June 1 (nothing has changed since).
Experts and CEO’s like Ed Bastian believe that airlines will not recover to pre-covid levels for 3 years and the economic toll on the airlines will be substantial.
Overall the airline play is risky and as a long term investment is at the least a 3 year play. With COVID coming back I am steering clear but if you really want to get into the airlines I have heard a lot of good about $ALK and $DAL.
Although if you want lower risk but access to all the airlines, an ETF called $JETS is a great pick.
In total, airlines are risky and super long term. Volatility will be high through COVID and you will most likely need to be tolerant to short term loss.