A lot goes into a public airline’s stock and value to shareholders — its earnings, obviously, but also the period in the company’s growth as well as its recognition among the average customer.
Until recently, the three airlines with the highest market capitalization, or the total value of company shares owned by its stockholders, in the word include European budget airline Ryanair (RYAOF) , Atlanta-based Delta Air Lines (DAL) and fellow U.S. low-coaster Southwest Airlines (LUV) . The latter, which was founded in 1967 out of San Antonio, was in a period of major growth over the last decade as it expanded beyond its core markets around the region after which it was named to more cross-country routes and international markets. By the end of 2023, the airline’s market cap was at $17 billion.
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IndiGo, a low-cost airline serving the Indian market, has been launched in 2006 and is currently listed under InterGlobe Aviation on two of the country’s stock exchanges. This winter, the airline reached a market cap of $1.466 trillion Indian rupees or $17.58 billion USD.
There is a reason this low-cost airline has been getting investor attention
On April 12, its value on the Bombay stock exchange was 3,806 Rupees or approximately $45.66 USD. This is a nearly 28% spike from the start of 2024 and pushes out Southwest for the spot of the third most valuable airline in the world.
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This growth has been catching the attention of investors. Morgan Stanley sent its clients a note saying that “yields in Q4 are running ahead of earlier guidance of flat year-on-year”while Jefferies changed its rating from “underperform” to “hold” while also raising its yield estimate to 2% and earnings before interest, taxes, depreciation, and amortisation (EBITDA) estimate from 14% to 16%.
Breeze Airways is another airline that has started bringing in profit
Over in the U.S., Salt Lake City-based Breeze Airways has had its first profitable month since launching in 2021 (it usually takes around 8-10 years for a new airline to reach profit)
The fast speed at which Breeze has been growing has also earned it the attention of investors for its potential as demand for travel is at an all-time high and many travelers are looking for affordable alternatives to mainstream carriers. Several investment firms have named it as a company to watch out for (it has not yet gone public.)
Spirit Airlines (SAVE) , meanwhile, has been fielding bankruptcy rumors after a federal judge blocked the JetBlue Airways (JBLU) acquisition that was supposed to save it from more than a year of unprofitable quarters over antitrust concerns.
Left without many other options for how to get back to profitability, Spirit has started furloughing pilots, delaying plane deliveries, and canceling some routes that it had planned to launch as part of its growth plan. Many of the Airbus (EADSF) planes Spirit had planned to receive in 2025 will now not be delivered until at least 2030 and 2031.
“We concluded that current regulatory obstacles will not permit us to close this transaction in a timely fashion under the merger agreement,” Spirit CEO Ted Christie said in a statement on the news.
