Even the darkest of clouds can have significant silver linings. This coronavirus craziness has managed to bring some great opportunities; but only if we are bold enough to recognize and seize them.
There is no doubt that the United States and the rest of the world are on their knees because of the coronavirus pandemic. Even the mighty president of the United States has been forced to accept the gravity of the situation after months of downplaying it for the sake of the economy.
Indeed, many industries have been affected. Among the most negatively impacted is the tourism industry, which is composed of hotels, resorts, and even transportation businesses such as airlines.
Needless to say, even major airlines are experiencing significant losses. American Airlines (NASDAQ: AAL) reports to have lost around $100 million per day in April because it halted its operations because of the widespread lockdowns imposed at that time. Other airlines such as Delta (DAL) and United (NASDAQ: UAL) report similar stories.
Even so, analysts are quite positive regarding the viability of the airline stocks. In this article, we try to see why.
These stocks are cheap
Delta Airlines (NYSE: DAL) stock has underperformed together with those of other airlines. As mentioned, this resulted in tremendous losses to the companies. But this might bring a huge opportunity to investors, though such an opportunity comes with a considerably high risk. Because the stocks are priced more cheaply than before, investors can acquire more and reap a lot later when the companies are back on their feet.
Will they ever be back? If we listen to analysts who make financial projections for us, they will definitely be. And the wait is not going to be that long. We talk more about this in the next point.
The world economy will eventually reopen
Many businesses have been forced to shut down because of the pandemic. Many owners lost their livelihood and many workers lost their jobs. But out of all this chaos the world will eventually emerge. Governments will soon find ways to work around the virus, which by the way, is predicted to stay for a long while. The world will have to learn to live with the virus, ushering in a new way of living that has been dubbed the “new normal.”
When will this new normal be? Given the hardships that the world is experiencing, it’s going to be sooner rather than later. Many nations, including the US, cannot afford anymore protracted lockdowns. More businesses will close and more jobs will be lost, leading to an economic mess that could prove to be more harmful than the virus itself in the long run.
As economies reopen, domestic and international travel will also resume, though with some changes that promote health and safety.
The airlines are adapting to the new normal
Airline companies implemented changes that help protect their passengers as well as their workers from the contagion. Reduced flight capacities to accommodate physical distancing measures, frequent disinfection, and temperature checks are just some of the health standards being followed now. While these changes surely do not bring as much money in, they help make sure that the companies are able to weather the most devastating part.
Even the darkest of clouds can have significant silver linings. This coronavirus craziness has managed to bring some great opportunities; but only if we are bold enough to recognize and seize them.
Photo by Andrea Piacquadio from Pexels
