Aviation stocks gaining interest and here is why

 The global airline industry has been expanding at a rapid pace in the past decade, thanks to soaring demand for cheap flights around the world. As of 2015, there were roughly 37 trillion miles flown on commercial airlines. Based on this trajectory, predictions for 2020 were looking good. In fact, analysts at the time were predicting that by the time 2020 rolled around, another 10 trillion miles would have been added. At the time, this incredible jump was attributed to both an increase in population and an increase in tourism, especially from emerging markets such as China and India. However, as we all know, this was not to be. As aviation stocks dipped during the covid 19 pandemic, the number of air travellers also decreased. The CDC reported that there were 736 cases of flu-like symptoms on airplanes between January 1st and February 2nd alone. And so began a rough 12 months for airline stocks. It meant that the price of airline stocks took a nose dive, practically going on sale from an investor’s perspective. Recovery is occurring slowly but surely, and as this process continues, here are the reasons as to why.

Renewed market optimism

As the vaccine rollout has gained momentum, airlines have started adding new routes, purchasing new aircrafts and hiring new pilots. For instance, back in June of this year, JetBlue declared it would be providing a service from London to New York while avation companies on indices markets such as Boeing, a company with a slew of investors, has revealed its plans to ensure delivery of half of its ordered aircrafts by the end of the year. In addition, domestic activity is on the rise; India’s has returned by 85% while China too has rebounded after stringent lockdowns in the early part of last year. Then there’s the fact that the Asian middle class is predicted to grow to an estimated 3.5 billion by 2032, meaning an increase in the region’s importance and new demands to be met. The global health crises has resulted in a great degree of turmoil within the aviation industry, but it’s also fostered a climate for new opportunities and new market players thanks to the void left by competitors and now predecessors. Companies who now strike while the iron is hot will be the ones who reap the rewards in the long run.

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Taking care of pilot issues

2020 saw a significant drop in the number of active pilots. However, according to the 2020-2029 CAE Pilot Demand Outlook, continued consumer demands in conjunction with age-based retirement will propel a resurgence in the need for pilots. In fact, the report goes on to suggest that 264,000 new pilots will be required by the global civil aviation industry over the course of the coming decade. In addition, pilots still have to clock over 1,500 flying hours in order to earn their ATP certificate. As many flight routes remain restricted and planes grounded, airlines and cargo operators alike are now forced to re-think and re-examine their pilot training strategies in order to meets demands for new recruits who wish to excel in the industry. In this climate, the need to invest in appropriate simulator training facilities as well as e-learning solutions has become of paramount importance. For instance, online solutions have ensured that cadet classes have continued while simulator models have allowed pilots to maintain the legal requirements and proficiency needed to ensure their readiness for the sky once the opportunities return. The last twelve months have certainly fuelled these tech solutions, creating a climate for more innovations, and thus one that’s ripe for investment. Lots of work is going towards the upkeep and continuance of these training methods as the world moves closer to a post-covid era, and with the digital implications only gaining further tractions, the time for investment is great, and not just for profit, but to also see the industry return with a vengeance.

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