Airline stocks have been on a roller coaster ride in recent years, buffeted by a series of challenges ranging from global lockdowns, and higher fuel prices to political instability. Nevertheless, the industry has shown resilience in the face of these difficulties, and many investors believe that now could be a good time to invest in airline stocks.
One key reason for this optimism is due to the growing demand for air travel and the increasing number of people who can afford to fly. Air travel is becoming more accessible to a wider range of people, and as the economy improves, more people are able to take advantage of this convenient and affordable form of transportation. This is expected to continue in the years ahead, providing a tailwind for airline stocks.
So, although there may be turbulence along the way, long-term investors could be rewarded for placing their faith in the airline industry. If this has you interested in investing in the airline sector, here are three top airline stocks to watch in the stock market today.
Airline Stocks To Buy [Or Sell] Right Now
- American Airlines Group Inc. (NASDAQ: AAL)
- Airport Transport Services Group Inc. (NASDAQ: ATSG)
- Delta Air Lines, Inc. (NYSE: DAL)
1. American Airlines Group (AAL Stock)
Starting off the list today is American Airlines Group (AAL). For starters, American Airlines Group is one of the world’s largest airline conglomerates. In detail, the company operates a fleet of over 900 aircraft, serving 350 destinations in 50 countries. Moreover, American Airlines employs over 130,000 people and generates annual revenue of over $29 billion in 2021.
AAL Recent Stock News
Just last week, American Airlines Group reported better-than-expected third-quarter 2022 financial results. Diving in, the company reported 3rd quarter 2022 earnings of $0.69 per share, along with revenue of $13.5 billion. This was versus Wall Street’s consensus earnings estimates of $0.54 per share, with revenue of $13.3 billion.
Additionally, the airline company posted a 50.1% increase in revenue during the same period in 2021. What’s more, American Airlines also said it expects Q4 2022 earnings of $0.50 to $0.70 per share, with revenue estimates of $12.5 billion to $12.7 billion.
Furthermore, American Airlines Group’s CEO Robert Isom commented, “Demand remains strong, and it’s clear that customers in the U.S. and other parts of the world continue to value air travel and the ability to reconnect post-pandemic. American has the youngest, most fuel-efficient fleet among U.S. network carriers, and we are well-positioned for the future because of the incredible efforts of our team.”
AAL Stock Chart
In the last month of trading action, American Airlines Group stock has rebounded 19.31% as of Tuesday morning. Meanwhile, shares of AAL stock are up 0.35% during Tuesday morning’s trading session at $14.15 a share.
2. Airport Transport Services Group (ATSG Stock)
Next up, we have Airport Transport Services Group (ATSG). Air Transport Services Group Inc along with its subsidiaries operates within the airfreight and logistics industry. Specifically, the company leases aircraft and provides airline operations, ground services, aircraft modification and maintenance, and other support services. Additionally, ATSG mainly focuses on the cargo transportation and package delivery industries.
ATSG Recent Stock News
This month, the company announced that it will host its third quarter 2022 investor conference call on Friday, November 4, 2022, at 10 a.m EST. Meanwhile, the company will release its Q3 2022 financial results on Thursday, November 3, 2022, after the close of the U.S. stock market. To recap, in the second quarter of 2022, ATSG reported earnings of $0.59 a share, with revenue of $509.7 million.
ATSG Stock Chart
Over the last month of trading, ATSG stock has rebounded 14.51%. While, on Tuesday morning, shares of ATSG stock are up 1.52% trading at $27.43 a share.
[Read More] What Happens To Stocks During A Recession?
3. Delta Air Lines (DAL Stock)
Lastly, let’s check out Delta Air Lines (DAL). In brief, Delta Air Lines is a major American airline, with its headquarters and largest hub at Hartsfield–Jackson Atlanta International Airport in Atlanta, Georgia. Delta operates an extensive domestic and international network, offering service to more than 275 destinations on six continents.
DAL Recent Stock News
Earlier this month, Delta reported a miss for its third-quarter 2022 earnings results. Getting straight to it, the company posted Q3 2022 earnings of $1.51 a share, along with revenue of $14 billion. For context, this is compared to analysts’ consensus estimates for Q3, which were earnings of $1.56 per share, and revenue of $12.9 billion. Though they missed on earnings, DAL reported a 52.7% increase in revenue during the same period, a year prior.
Moreover, Ed Bastian, Delta’s CEO said, “Thanks to the incredible work of our entire team, Delta delivered a strong September quarter with record quarterly revenues and a double-digit operating margin. The travel recovery continues as consumer spend shifts to experiences and demand improves in corporate and international.“
DAL Stock Chart
Similar to the names mentioned above, in the last month of trading, DAL stock recovered 19.31%. Though, shares of Delta stock are still down 17.03% year-to-date. Meanwhile, during Tuesday’s mid-morning trading session, DAL stock is trading modestly higher up 0.32% at $33.38 a share.
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Crypto synthetic assets, explained
A synthetic asset represents real-world assets digitally, created and traded on blockchain networks, mirroring the value and behavior of its underlying…
A synthetic asset represents real-world assets digitally, created and traded on blockchain networks, mirroring the value and behavior of its underlying counterpart.
What are crypto synthetic assets?
Blockchain-based financial instruments called crypto synthetic assets imitate the value and behavior of actual assets or financial instruments.
Crypto synthetic assets, also known as “synthetic assets,” are a class of digital financial instruments created to mimic the value and performance of actual financial assets or assets from the real world, such as stocks, commodities, currencies, or even other cryptocurrencies, without actually owning the underlying assets.
These artificial assets are produced using complex financial derivatives and smart contracts on blockchain platforms, mainly in decentralized finance (DeFi) ecosystems. The ability to create decentralized smart contracts on blockchain systems like Ethereum, use collateral to secure value, track target asset prices precisely and create flexible leveraged or derivative products are important characteristics of crypto synthetic assets.
DeFi customers now have access to a wider range of financial markets and assets, which lessens their reliance on conventional intermediaries. Users should take caution, though, as these instruments add complexity and risk, necessitating a thorough knowledge of their underlying workings and effects on investing strategies
Traditional vs. crypto synthetic assets
Traditional assets are tangible or monetary items like stocks, bonds and commodities exchanged on established financial markets. In contrast, crypto synthetic assets are digital representations built on blockchain technology and intended to resemble the value and performance of these conventional assets.
The fundamental distinction between traditional and crypto synthetic assets is that traditional assets are physical or paper-based, whereas crypto synthetic assets only exist in digital form on blockchain networks. While crypto synthetics have advantages over traditional assets in terms of accessibility, liquidity and programmability, they also come with unique risks and complexities.
Types of crypto synthetic assets
Crypto synthetic assets come in various forms, like synthetic stablecoins, tokenized commodities and equities, leveraged and inverse tokens, and yield-bearing synthetic assets.
Digital tokens known as synthetic stablecoins are intended to mimic the value and stability of fiat money, such as the United States dollar or the euro. They give people a mechanism to exchange goods and services and store value in the cryptocurrency ecosystem without experiencing the volatility of cryptocurrencies.
One example of a synthetic stablecoin is sUSD, which is developed on the Synthetix platform. It aims to provide users with access to a stable form of digital cash that matches the value of the U.S. dollar.
Tokenized commodities and equities
Commodities and stocks that have been tokenized serve as digital representations of real-world assets like gold, oil, stocks and other commodities on blockchain networks. These synthetic assets allow for the decentralized fractional ownership and exchange of conventional assets.
An example of a synthetic asset that tracks the price of crude oil is sOIL, which is also developed on the Synthetix platform. Without really holding any oil, it enables investors to become more exposed to changes in the price.
Leveraged and inverse tokens
Synthetic assets, known as leveraged and inverse tokens, are developed to amplify or counteract the price changes of an underlying asset — inverse tokens profit when the underlying asset’s price decreases, while leveraged tokens magnify profits and losses.
Yield-bearing synthetic assets
Within the DeFi ecosystem, yield-bearing synthetic assets give holders returns through staking or lending, providing a chance to generate passive income.
An example of a synthetic asset is cDAI, developed by the Compound protocol. Dai (DAI) stablecoins can be given to participate in lending operations on the Compound platform and earn interest. Since cDAI accrues interest to holders over time, it qualifies as a yield-bearing synthetic asset.
Applications of crypto synthetic assets
Crypto synthetic assets can be utilized by traders seeking increased profits, investors diversifying their holdings or DeFi aficionados engaged in yield farming.
Trading and investing opportunities
Crypto synthetic assets offer a gateway to a variety of trading and investment opportunities. They enable traders to engage in leveraged trading, increasing their exposure to market fluctuations and potentially generating bigger returns (or losses) than they could from more conventional trading.
Additionally, synthetic assets cover a wide range of underlying assets inside the crypto ecosystem, including stocks and commodities, giving investors a straightforward way to diversify their portfolios.
Yield farming and liquidity provision
Users who stake cryptographic synthetic assets in DeFi protocols can engage in yield farming, earning incentives in the form of extra synthetic assets or governance tokens for actively participating in liquidity provision and DeFi operations.
Synthetic assets also significantly increase liquidity pools and DeFi platforms’ overall liquidity, which is essential for facilitating effective trading, lending and borrowing within the DeFi ecosystem.
Risk management and hedging strategies
Synthetic assets provide strong risk management tools and hedging possibilities. Traders and investors can use inverse synthetic assets as efficient hedges to protect their portfolios from declines in the underlying assets.
Synthetic stablecoins also offer a decentralized alternative to conventional stablecoins, protecting the value of assets in the face of the market’s inherent volatility.
Role of DeFi in the creation and trading of synthetic assets
By enabling users to create, trade and diversify their portfolios with synthetic assets, DeFi democratizes finance by upending established financial systems and boosting financial inclusion worldwide.
The development and trade of synthetic assets are fundamental to changing the conventional financial environment, and DeFi is a key player in this process. DeFi platforms revolutionize how we interact with financial instruments by utilizing blockchain technology and smart contracts to make the creation, issue and trading of synthetic assets straightforward.
First, DeFi eliminates the need for intermediaries, improving accessibility and productivity. Users can issue tokens that replicate the value of real-world assets, such as equities, commodities and fiat currencies, by collateralizing cryptocurrencies.
Second, DeFi’s open and permissionless design encourages innovation by allowing programmers to test different synthetic asset designs and trading strategies. By providing consumers with 24/7 access to a wide variety of assets, this innovation has democratized access to international markets.
DeFi platforms also offer liquidity pools where users can easily trade synthetic assets. These systems promote yield farming by rewarding users for donating money and participating in the ecosystem.
Advantages of crypto synthetic assets
Crypto synthetic assets provide a rich tapestry of advantages, including diversification, leverage, DeFi engagement, liquidity augmentation and risk mitigation.
Cryptographic synthetic assets offer many benefits for the digital finance space. The ability to provide access to a variety of assets, including traditional stocks, commodities and currencies, is the most important of these advantages because it enables users to seamlessly diversify their portfolios within the cryptocurrency space, reducing risk and improving investment strategies.
These assets also open the door to leverage, allowing traders to increase their exposure to asset price volatility and perhaps generate higher returns. They play a crucial role in DeFi, enabling users to participate actively in yield farming and liquidity provision and earning rewards for doing so.
Additionally, synthetic assets provide the foundation for liquidity pools, boosting the overall liquidity of DeFi platforms — a crucial component for enabling effective trading and lending activities. These resources also serve as essential risk management tools, giving consumers the skills they need to protect their investments against erratic price fluctuations.
Challenges and Risks concerned with synthetic assets
While synthetic assets present novel opportunities and solutions, they are not without difficulties and hazards, such as smart contract weaknesses, liquidity issues, the unpredictability of regulations and oracle-related problems.
The use of synthetic assets in the crypto and blockchain industries comes with a number of risks and issues that need to be carefully considered. The possibility of smart contract flaws or exploits, which might lead to significant losses, is one of the main worries. For instance, in the infamous DAO attack of 2016, a smart contract vulnerability resulted in the theft of about $50 million worth of Ether (ETH), highlighting the risks posed by these complex financial instruments.
Another issue is market liquidity, as some synthetic assets may have less of it than their counterparts in the real world. This could result in price manipulation or slippage during trading, which would affect the stability of the market as a whole.
Furthermore, regulatory oversight continues to be a serious concern as governments throughout the world struggle to define and control these unique financial products. The continuing legal disputes and regulatory changes involving stablecoins like Tether (USDT) provide an example of the possible legal difficulties that synthetic assets may encounter.
Finally, over-reliance on oracle systems, which provide smart contracts access to real-world data, creates security risks. For instance, if an oracle is compromised, it may offer erroneous data, which may impact the utility and value of artificial assets that rely on it.
JetBlue may force American and Southwest to offer free WiFi
Airlines love extra fees, even Southwest which doesn’t charge for as many things as some of its rivals.
Airlines have made fees a major part of their business model. Aside from Southwest Airlines, which never charges for baggage, most airlines charge extra for checked bags for their most basic fares.
That's another trick the JetBlue, American, and United Airlines (UAL) - Get Free Report love to use as well. They sell all sorts of levels of fares where "Basic Economy" barely gets you on board, while higher-level tiers come with seat assignments, carry-on bags, and even checked bags.
Having different ticket levels is really just another way to add fees without calling them fees. It generally costs less to buy a higher-tiered ticket than it does to purchase seat assignments, bags, and other perks on an a la carte basis.
Sometimes, when one airline makes a pricing change, it forces its rivals to do the same. That's not always the case, however, as Southwest Airlines (LUV) - Get Free Report offers free checked bags at every level of ticket the airline sells.
That's a major giveback to passengers, as the airlines still generally offer cheaper tickets than United, American, and other carriers considered "full fare." Still, while you would think a major airline dropping a key fee would lead to others doing the same, that has not been the case.
JetBlue has offered a major free perk for almost a decade. Delta Airlines followed and will have the same offer in place on all its domestic flights by the end of the year (with international following by the end of 2024).
A second airline making the move and offering free WiFi could push American, United, and Southwest to do the same.
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United Airlines inches closer to free WiFi.
United Airlines said back in 2019 during an earnings call that it hoped to build up its technology to the point where it had the bandwidth to offer WiFi for free. Now, almost four years later, the airline has been spotted testing free internet service on select flights.
"Looks like United is slowly dipping its toes in trialing out complimentary WiFi?," @iTripReport shared on X, formerly known as Twitter.
United making the move would almost certainly force every other major non-discount airline to at least consider making WiFi for free.
"Meanwhile, American Airlines has the bandwidth and charges more for it than anyone else in the industry. They promised free inflight messaging at their Media Day in 2017 and then quietly reneged," View From the Wing's Gary Leff wrote.
Southwest Airlines has gone in the other direction
While Southwest Airlines has marketed itself as the airline that does not charge a lot of hidden fees, that has not been the case with its WiFi. Early this year, the airline made a quiet change that many customers were outraged by.
The airline used to charge $8 for internet, which included all flight segments. In February, however, the airline changed to charging $8 per flight segment. That means that passengers who already have the inconvenience of having to make a connection now also have to pay for WiFi multiple times if they want to stay connected.
Southwest tried to justify the move at the time.
"In addition to upgrading our current fleet equipped with our legacy provider, Anuvu, we’re introducing an additional internet provider, Viasat, which will provide WiFi hardware on new aircraft in early March. With two vendors providing connectivity in our fleet, we’re introducing a new pricing model for onboard internet," the airline shared.
Southwest does offer customers free text messaging as well as a number of live television channels which do not cost extra.
Here’s when to avoid shopping at Costco
The warehouse club makes getting low prices easy, but that does not mean members can’t do things to make the experience yet easier.
Costco generally makes shopping pretty easy for members.
The chain offers weekly deals and specials, but for the most part, on most staples and recurring household items you know you're getting a good price no matter when you shop.
Prices change, but because the warehouse club has massive buying power with its vendors, most pricing remains consistent for weeks or months at a time.
When you pay $60 for a standard Gold Membership, you get access to the chain's warehouse club. In exchange for that fee, Costco (COST) - Get Free Report has been vigilant about keeping prices down. Chief Financial Officer Richard Galanti elaborated on this point during the chain's third-quarter-earnings call.
"At the end of the day, if margins year over year were down 50 or 100 basis points [0.5 or 1 percentage point] back then, that implies that some portion of it, maybe instead of an 8% or 9% increase, our members were seeing a 6% or 7% or 8% increase," he said.
"Whatever that was, we felt that we were doing as good a job as anyone out there given the item nature of our business to lower prices for our members and hopefully drive sales."
Basically, Costco has shown itself willing to make less money in order to sell items cheaper than its rivals. That's true no matter when you visit the chain, but still there are important reasons that you might want to visit at certain times instead of others.
Costco has a worst time to shop
For many Costco members, a visit to one of the chain's warehouse is at least partly about entertainment.
You might enter with a shopping list, but there's also the treasure hunt aspect of the chain where you never know what you might find at an amazing price. Costco also offers free samples, which for many shoppers add a layer of fun to a visit.
There's one clear time, however, when social media warn people not to visit Costco, according to TheStreet's sister publication Parade.
"There is no greater sensory hell than Sunday morning Costco," wrote u/motherconnoisseur in the Costco subreddit. "I'm still gonna brave the masses for that sweet, sweet $5 rotisserie chicken, though."
That's backed up by countless other posts on Reddit, although one poster did note that the problem is not unique to Costco.
"Sundays are the worst day to hit the grocery store, too — whole families blocking aisles [and] long lines. I stay away."
Costco explains how it keeps prices down
While Sunday mornings, and weekends in general, are busy times at Costco, the chain's buyers work ever day to keep prices down.
"I just know that our merchants and Craig and Ron and Claudine [Adamo], our head of merchandising, are pushing the buyers each day to do that and figuring out how can we take the monies that we get, any types of monies, from the vendors that can be used to drive business," Galanti shared.
The CFO said that Costco buyers have some advantages over their counterparts at rival chains.
"I think it's easier for us, on the one hand, that we do a lot of volume on a fewer items. We have buyers that literally are managing a couple of dozen items, not 200 items," he said.
Costco will also do its pricing part.
"We're going to invest a little on price. How much are you willing to invest in price? So it's a partnership," the executive said.
"And I think we are in a better position to do that simply because, if you take our $230 billion or $240 billion in sales and divide it by 3,800 SKUs, it's a lot more pricing power per SKU and a lot more focus on an item-by-item basis. So that's what we do."
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