Pick This Stock Over American Airlines As The Dip Ends
- Date: 09-Mar-2022
- Source: Forbes
- Sector:Financial Markets
- Country:Gulf
Pick This Stock Over American Airlines As The Dip Ends
CHICAGO, IL - JANUARY 29: A new American Airlines 737-800 aircraft featuring a new paint job with ... [+] the company’s new logo sits at a gate at O'Hare Airport on January 29, 2013 in Chicago, Illinois. This year, American plans to take delivery of nearly 60 new aircraft featuring the logo and paint. American currently has a fleet of nearly 900 aircraft that fly more than 3,500 daily flights worldwide. (Photo by Scott Olson/Getty Images)
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The shares of American Airlines (NASDAQ: AAL) and Delta Air Lines (NYSE: DAL) are observing a steep decline due to rising fuel prices and an overall geopolitical risk premium weighing on the broader market. Moreover, both companies do not have significant fuel hedging contracts to safeguard against short-term spikes in benchmark prices. Considering a scenario where oil prices make a dent on American and Delta Airlines’ profits for a couple of quarters, strong passenger numbers at TSA checkpoints are expected to assist cash generation. Notably, Delta Airlines observed just $529 million of operating cash burn in the past two years combined, as compared to $5.8 billion by American Airlines. Thus, a low cash burn figure and
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