Looking for a new investment opportunity in 2022? With travel now well and truly back on the agenda for much of the world, we’re seeing airline stocks soar to double digit gains, with Europe’s travel and leisure sector adding an impressive 2.5 per cent earlier this week.
After a tumultuous two years that have been punctuated by grounded flights, cancelled bookings and widespread entry restrictions, there’s no denying that it has been a tumultuous period for travel agents, tour operators and airlines alike. We’ve seen companies close, staff laid off and flight routes removed indefinitely – but this year, it seems that things are finally beginning to look a little brighter.
Crashing stock prices have already been offering investors the potential to make some great gains once the situation improves, with trading platforms like the News Spy official site reporting a dramatic surge in those looking to take advantage of tumbling airline stocks early on in the pandemic. But conversely, many others have held off on buying until now due to ongoing uncertainty as to what could be around the next corner.
Now, however, it seems we have reason to feel a little bit more confident about a return to normality as the year wears on, and although many countries still remain closed to international tourists, there have been whispers of gradual re-openings across Asia – a continent that has remained the most steadfast in its rigid ongoing entry restrictions.
This buoyant start to the new year has seen the FTSE 100 and FTSE 250 climb in encouraging ways, and both were already up by 1 per cent on the very first day of trading this year. As travel enthusiasts continue to make plans for travel in 2022, those numbers are continuing to surge, and the light at the end of the tunnel likely has all of us sighing with relief.
As Omicron cases in the UK continue to wane and fears allayed regarding its severity, the nation has further relaxed its travel requirements, having scrapped the need for pre- and post-return PCR tests and isolation periods – making it easier than it has been in some while to fly off carefree into the sunshine.
British Airways owner IAG has been one of the top performers of the year so far when it comes to airline stocks, up 10.4 per cent in the first week of January alone, and has continued to rally ever since. Rolls Royce, as an airline supplier, was up 3.5 per cent, while budget airlines Wizz Air and Easyjet had gained 11.2 per cent and 10.1 per cent respectively in the FTSE 250.
Package travel firm TUI, too, was up by 9.5 per cent, while cruise company Carnival enjoyed a 7.5 per cent boost.
For those who were quick to act on falling stock prices early on in the pandemic, the return on investment is already beginning to pay off – but if you’re a nervous trader and have been biding your time, then now is the time to act. As the pandemic continues to become more manageable, travel industry stocks and shares prices will only continue to surge as customers become increasingly more comfortable with travelling internationally once more.
The first weeks of trading of 2022 have brought fresh hope to investors in the airline sector, and rightly so. It’s not just the stock prices that are up, but passenger numbers, too – with Wizz Air reporting a dramatic 296.3 per cent increase back in December, year on year.
Of course, the travel industry isn’t the only place traders should be looking as we head further into the new year, and FTSE 100’s financial sector is also putting on a promising performance. Banking and life insurance stocks have bounced back by 1.9 and 0.9 per cent respectively, while British retailers have surged by 2 per cent, despite the fact that footfall in physical shops has yet to return to the levels they were at pre-pandemic.
Could this really be the year we finally begin to put the pandemic behind us? It’s certainly looking hopeful – and those who invested in tumbling stocks and shares back in March 2020 could be about to make some impressive profits as a result. It’s set to be an exciting year in the world of trading across the board, and we’ll wait with baited breath to see which companies come out on top by the time the year is out.
Disclaimer: Investing money carries risk, do so at your own risk and we advise people to never invest more money than they can afford to lose and to seek professional advice before doing so.
