Shares Of These 10 Airline Stocks Are Cheaper Than Their Tickets

We’re at the beginning of the spring season when individuals in the U.S. are finalizing preparations for summer vacations.

To many air travelers' surprise, upon checking the prices for flights, it seems recent inflation has stretched to every corner of the American economy with Bloomberg reporting that the average cost of flights has gone up 36% in 2022.

As investors, we like to understand why something is happening and what we can do to prepare ourselves for it.

The context: Airline stocks have been trying to recover from the COVID-19 pandemic that put the industry on life-support, requiring a $200 billion bailout in 2020. The same companies are now trading lower amid the recent COVID-19 outbreak in China and the ongoing war in Ukraine that has sent oil prices to levels unseen since 2014.

The 36% price hike in airline tickets can be attributed to the following things:

• Seasonality: There is an expected 7% to 9% increase in airfares during spring and summer.
• Demand: As more travelers want to fly, airlines raise prices to produce greater revenue.
• Fuel prices: The Russia/Ukraine war has increased prices for oil, which in turn has affected jet fuel prices.

We can possibly hedge against rising airfares by purchasing the beaten-down stock of the airlines. Luckily, those stocks are trading at a discount right now. Here are some examples:

Delta Air Lines, Inc DAL
United Airlines Holdings Inc UAL
American Airlines Group Inc AAL
Southwest Airlines Co LUV
Spirit Airlines Incorporated SAVE
JetBlue Airways Corporation JBLU
Frontier Group Holdings Inc ULCC
SkyWest, Inc. SKYW
Textron Inc. TXT
Sun Country Airlines Holdings Inc SNCY