In this article, we discuss the 10 worst airport stocks to buy along with the latest developments in the air travel industry.
Air travel plays a significant role in the global economy as it directly contributes to economic growth by facilitating trade and tourism. The aviation industry generates millions of jobs worldwide, both directly and indirectly.
The industry was hit quite hard by the pandemic and later the Russia-Ukraine conflict. However, it has experienced a remarkable resurgence in passenger demand, which is surpassing pre-pandemic levels and signaling a strong recovery for the aviation industry.
Bain & Company forecasts reveal that annual air travel demand is on track to exceed pre-pandemic levels, specifically measured by revenue passenger kilometers (RPK). By 2030, the global RPK is expected to reach 11.4 trillion, which represents 136% of the 2019 volume.
Moreover, the Airports Council International (ACI) World released its 2024 Annual World Airport Traffic Report on September 19 where the council compiled data from over 2,700 airports across more than 180 countries.
The council forecasts a 10% increase in global passenger traffic for 2024, at approximately 9.5 billion. In 2023, passenger traffic hit 8.7 billion, representing a 30.6% increase from 2022 and recovering 95% of pre-pandemic levels.
For 2024, the passenger numbers are expected to exceed 4% of pre-pandemic numbers. Data from the first half of 2024 shows an 11% year-over-year increase in passenger numbers, as international travel increased by 17%. The report projects domestic travel will account for 5.4 billion passengers, while international travel is expected to reach 4.1 billion.
Artificial Intelligence: Transformative Trend In Airline Industry
Using AI in the airline industry marks a significant change toward improving efficiency and customer satisfaction. It shows how technology can make services better while still keeping the important human touch in operations. We discussed this in our article about 11 Worst Aviation Stocks to Buy According to Analysts. Here is an excerpt from the article:
“Like most industries of today, airlines are also implementing AI to improve the efficiency of their operations. According to an August report by CNBC, these companies are using AI for tasks like ground control, customer service, and optimizing flight routes.
American Airlines introduced its AI-powered “smart gating” system at its Dallas-Fort Worth control center. The tool automatically assigns gates to incoming flights, which cut runway taxi time by around 20%, or two minutes per flight, across five airports. The system also helps passengers, baggage, and crews make quicker connections, which improves overall efficiency.
Alaska is using AI to streamline flight paths and optimize aircraft turnaround times at gates. Its tool is described as “Waze for the skies,” and it uses AI to plan faster routes, which saves fuel and reduces delays. Additionally, the system monitors ground operations as it tracks when fuel, catering, and baggage trucks arrive and depart, which allows agents to address delays immediately.
United has implemented generative AI for customer service, especially during flight disruptions. The AI generates detailed, empathetic messages explaining delays, which has increased customer satisfaction by 4% since its rollout on 6,000 flights.”
Moreover, the report by CNBC stated that AI will not be significantly replacing human labor. Instead, it will help humans work more efficiently.
With that, let’s take a look at the 10 Worst Airport Stocks to Buy.
10 Worst Airport Stocks to Buy
Our Methodology
For this article, we used the Yahoo Finance stocks screener along with ETFs and online rankings to identify over 20 airport or airport related stocks. We narrowed our list to 10 stocks with the lowest average analyst price target, as of September 26. The stocks are listed in descending order of their average price target. We also added hedge fund sentiment around the stocks that trade on the NYSE and NASDAQ, which was taken from Insider Monkey’s database of over 900 elite hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Worst Airport Stocks to Buy
10. Aeroports de Paris SA (OTC:AEOXF)
Number of Hedge Fund Holders: N/A
Average Analyst Price Target Upside: 28.4%
Aeroports de Paris SA (OTC:AEOXF), now known as Groupe ADP, is a prominent international airport operator headquartered in Paris, France. The company manages the three major airports serving the Paris metropolitan area, Charles de Gaulle, Orly, and Le Bourget. It is responsible for the full range of airport services, including engineering, design, infrastructure development, and day-to-day operations.
The company manages 26 airports worldwide through concessions, partnerships, and management contracts. Beyond these core assets, it is actively involved in over 100 airports across more than 50 countries through its various subsidiaries and business ventures.
Groupe ADP (OTC:AEOXF) has embarked on a transformative strategic roadmap known as “2025 Pioneers.” The initiative is designed to reshape the airport experience and enhance operational sustainability. The organization views itself as a hospitality group dedicated to serving travelers by reimagining the airport experience through smooth journeys and innovative services.
The organization aims to transform airport infrastructure into multi-modal transport hubs that use eco-friendly materials and connect well with other transport systems. The company aims to build strong relationships with local communities and address their needs for energy, logistics, and real estate.
Groupe ADP (OTC:AEOXF) has been covered by 18 analysts with 6 Buy-equivalent and 12 Hold ratings. Their average price target shows an upside of 28.4% to the company’s stock, as of September 26. It is the 10th stock on our list of worst airport stocks.
9. Fraport AG (OTC:FPRUF)
Number of Hedge Fund Holders: N/A
Average Analyst Price Target Upside: 26.1%
Fraport AG (OTC:FPRUF) is a major global player in airport management. It operates Frankfurt Airport, one of the busiest airports worldwide, and offers services in sectors such as aviation, retail, real estate, ground handling, and international airport operations.
The company manages terminal facilities, develops commercial spaces, and provides baggage and passenger services. Internationally, it manages airports in countries like Turkey, Bulgaria, and Peru.
The company stock has been covered by 21 analysts with an average price target of $65.08, which represents an upside of 26.1% at the time of writing on September 26. This brings the company to the 9th spot on our list of worst airport stocks to buy.
On September 9, Fraport (OTC:FPRUF) agreed to sell its 10% stake in Delhi International Airport Limited, the operator of Delhi Airport, to GMR Airports Infrastructure Limited (GIL) for $126 million.
It will help the company reduce its net financial debt. Despite the divestment, Fraport will continue to provide support to Delhi Airport through an existing Airport Operator Agreement. The sale is expected to close within 180 days pending approval from the Airports Authority of India and GIL shareholders.
8. Japan Airport Terminal Co., Ltd. (OTC:JAIRF)
Number of Hedge Fund Holders: N/A
Average Analyst Price Target Upside: 24.37%
Japan Airport Terminal Co., Ltd. (OTC:JAIRF) is a prominent player in the airport sector, focusing on the construction, management, and upkeep of passenger terminals and airport infrastructure. The company oversees key airports including Haneda, Narita International, Kansai International, and Central Japan International airports.
The company provides a variety of products and services for the needs of airport customers. Its core business operations include managing terminals, parking facilities, duty-free shops, lounges, and travel assistance. Additionally, it supplies materials and equipment for use in passenger terminals and organizes bonded art auctions.
Japan Airport Terminal (OTC:JAIRF) has outlined a medium-term business plan, “To Be a World Best Airport 2025,” which covers FY 2022 to 2025. The plan aims to support its long-term vision of becoming a leading airport focused on advanced, eco-friendly, and customer-centric services by 2030.
The new plan emphasizes sustainable growth for both the company and society, with a focus on adjusting operations and preparing for a rise in air traffic, in line with Japan’s target of attracting 60 million annual inbound travelers by 2030.
Japan Airport Terminal (OTC:JAIRF) is 8th on our list of worst airport stocks to buy as its average analyst price target of $42.88 implies a 24.37% upside to the company’s stock, as of September 26.
7. Corporación América Airports S.A. (NYSE:CAAP)
Number of Hedge Fund Holders: 5
Average Analyst Price Target Upside: 24.36%
Corporación América Airports S.A. (NYSE:CAAP) is a major global private airport operator, managing 52 airports across Latin America and Europe, including countries like Argentina, Brazil, Uruguay, Ecuador, Armenia, and Italy.
In 2023, the company’s airports served 81.1 million passengers, just 3.6% lower than pre-pandemic levels in 2019. Of these passengers, 35% were international, 56% were domestic, and 9% were in transit. It ranks at 7 on our list of worst airport stocks to buy.
The company’s primary revenue driver is passenger traffic and earns aeronautical revenue through fees charged to departing passengers and airlines for landing, parking, and using its facilities. Its commercial revenue is generated from services like retail, duty-free shops, parking, food and beverages, and advertising.
Corporación América Airports (NYSE:CAAP) reported its second quarter results on August 21. According to its unaudited financial results for Q2 2024, its consolidated revenues were $366.1 million, up slightly by 0.2% year-over-year.
Aeronautical revenues increased 3.2%, which offset a 2.9% decline in commercial revenues. Passenger traffic fell by 7.8% to 18.2 million, while cargo volume grew by 4.7%. Lastly, the company maintained a strong cash position of $439.4 million.
According to the company’s CEO, it is negotiating a $400 million CapEx plan with the Armenian government and is awaiting approval for Florence Airport’s new master plan. The company is also exploring growth opportunities, driven by recent open skies agreements in Argentina that may open up new routes and destinations. The company’s solid balance sheet positions it to pursue long-term global growth initiatives.
6. Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (NASDAQ:OMAB)
Number of Hedge Fund Holders: 6
Average Analyst Price Target Upside: 13.41%
Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. (NASDAQ:OMAB), also known as OMA, is a Mexican airport operator headquartered in San Pedro. It manages 13 international airports across northern and central Mexico, including key cities like Monterrey and popular tourist spots such as Acapulco and Mazatlán. In addition to airport operations, OMA is involved in freight logistics, hotel management, commercial real estate, and an industrial park.
The airports under OMA (NASDAQ:OMAB) management are under 50-year concessions, which can be extended for an additional 50 years, and they generate revenue from passenger fees, rentals, and several other commercial activities.
While the company ranks 6th on our list of worst airport stocks to buy, the analysts have recently been bullish on it. On September 5, The Fly reported that Morgan Stanley analyst Jens Spiess upgraded the company’s stock from Equal Weight to Overweight. However, its price target was reduced to $77 from $82.
Using a proprietary traffic model that reviews thousands of flight schedules to gauge seat capacity and trends, the firm observed that while Q3 traffic figures for all Mexican airport operators were underwhelming, projections for the next two quarters showed surprisingly strong potential.
The average analyst price target of $79.98 among 16 analysts shows an upside of 13.41% for the company, as of September 26.
5. Grupo Aeroportuario del Sureste, S. A. B. de C. V. (NYSE:ASR)
Number of Hedge Fund Holders: 6
Average Analyst Price Target Upside: 12.16%
Grupo Aeroportuario del Sureste, S. A. B. de C. V. (NYSE:ASR), also known as ASUR, is a prominent Mexican airport operator based in Mexico City. It was established in 1998 as part of a government initiative to allow private investment in Mexico’s airport infrastructure.
According to its 2023 annual report, the company operates nine airports in southeastern Mexico. Some of the major ones include Cancún, which was the second busiest in Mexico in 2023 for passenger traffic and the busiest for international passengers. The company also manages airports in Cozumel, Huatulco, Mérida, Minatitlán, Oaxaca, Tapachula, Veracruz, and Villahermosa.
In Colombia, ASUR (NYSE:ASR) owns a controlling stake in Airplan, which operates multiple airports, including those in Medellín and Rionegro. Additionally, its subsidiary Aerostar manages the LMM Airport in San Juan, Puerto Rico, under a 40-year lease from February 2013.
The company’s revenue streams include aeronautical services, non-aeronautical services, and construction services. Aeronautical services, which are heavily regulated, usually generate the largest portion of revenue, followed by non-aeronautical services, which include commercial activities like leasing space to retailers and restaurants.
With an average price target of $321.02 among 17 analysts, ASUR (NYSE:ASR) has an average price target upside of 12.16%. While it makes it to the list of worst airport stocks to buy, recently analysts have been bullish on the stock.
On September 8, The Fly reported that Goldman Sachs analyst Joao Frizo resumed coverage of it with a Buy rating and a $338 price target. The firm believes that Mexican airports, including Asur, are a good investment because they are expected to grow their earnings strongly.
It also thinks that the current economic conditions are favorable for these companies. However, the firm also pointed out that there may be some increased risk from government regulations in Mexico after the upcoming presidential elections.
4. Aena S.M.E., S.A. (OTC:ANNSF)
Number of Hedge Fund Holders: N/A
Average Analyst Price Target Upside: 3.63%
Aena S.M.E., S.A. (OTC:ANNSF) is one of the largest airport operators in the world. It manages a network of 46 airports and two heliports domestically and operates in 33 airports across five countries beyond Spain through its subsidiaries and affiliates.
The company recently updated its Strategic Plan for 2022-2026, according to which it expects over 300 million passengers by 2025, which was priorly projected for 2026. The company has also accelerated its target for achieving zero emissions, now aiming for 2030 instead of 2040, which shows its commitment to sustainability.
In 2023, its airports served 283 million passengers, exceeding pre-pandemic levels, and it projects about 294 million passengers for 2024, with expectations to reach approximately 310 million by the end of the plan period.
In terms of commercial revenue, Aena (OTC:ANNSF) anticipates growth of up to 48% by 2026 compared to 2019, with significant increases in revenue per passenger. Recent tenders for duty-free shops, food and beverage outlets, and retail spaces have led to a 20% increase in Minimum Annual Guaranteed rents in 2023, with expectations of a 46% rise by 2026. Real estate revenues have also surged by over 34% compared to 2019.
According to analyst price target upsides, Aena (OTC:ANNSF) takes the 4th spot on our list of worst airport stocks to buy. Based on coverage by 8 analysts, the company has an average price target of $228.11, which shows an upside of 3.63% on September 26.
3. Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (NYSE:PAC)
Number of Hedge Fund Holders: 7
Average Analyst Price Target Upside: 0.81%
Grupo Aeroportuario del Pacífico, S.A.B. de C.V. (NYSE:PAC), also known as GAP Airports, is an airport operator based in Guadalajara, Mexico. It oversees a network of 12 airports across central and northwestern Mexico and two in Jamaica.
The airports managed by GAP feature important sites like Guadalajara, Tijuana, Puerto Vallarta, and Los Cabos, along with Sangster International Airport and Norman Manley International Airport in Jamaica. The company caters to many clients, including airlines, freight companies, retail brands, and travelers.
GAP Airports (NYSE:PAC) stock has been covered by 17 analysts with an average price target of $181, which implies an upside of 0.81%, as of September 26. Despite neutral/negative sentiment by analysts, the company’s combination of strategic route expansion, strong commercial revenue growth, sound financial management, and commitment to exploring new markets makes it a strong company.
In the first half of the year, the company added 13 new routes, which include international connections, and has planned the addition of around 11 more international routes in the second half of the year.
Moreover, the company showed strong performance in non-aeronautical revenues, which increased by nearly 11%. The growth has been driven primarily by enhanced offerings in food and beverage, car rentals, and VIP lounge services.
As of the second quarter, 7 hedge funds had stakes in GAP Airports (NYSE:PAC), worth $86.696 million. As of June 30, Renaissance Technologies owns 532,200 shares worth $82.9 million, according to Insider Monkey’s Q2 database. The company is the third worst stock to buy according to analyst price target upside as of September 26.
2. Flughafen Zürich AG (OTC:UZAPF)
Number of Hedge Fund Holders: N/A
Average Analyst Price Target Upside: 0.03%
Flughafen Zürich AG (OTC:UZAPF) operates Zurich Airport and manages a portfolio of airports worldwide including Colombia, India, and Brazil. The Canton of Zurich is its largest shareholder. Flughafen Zürich (OTC:UZAPF) is showing progress and is one of the first airport businesses that is returning to pre-pandemic level business.
In the first half of 2024, Zurich Airport served over 14.5 million passengers, representing a 10.6% year-over-year increase, with peak days exceeding 100,000 travelers. The airport offered services from 62 airlines to 200 destinations.
In August 2024, Zurich Airport handled nearly 3.1 million passengers, up 6% year-over-year, and reached 99.5% of pre-pandemic levels from August 2019. Local passengers numbered 2.14 million, while transfer passengers accounted for 31% or nearly 950,000 passengers. Air traffic movements rose by 4% year-over-year to 24,132, representing 96% of the 2019 level.
The average number of passengers per flight increased to 145, and the seat load factor reached 85%, both slightly higher than last year. Freight volume grew by 23% year-on-year, totaling 33,640 tons. However, it remained 5% below August 2019 levels.
Flughafen Zürich (OTC:UZAPF) has an average price target of $236.44 among 15 analysts, which shows an upside of 0.03% from current levels on September 26. It takes the 2nd spot on our list of worst airport stocks to buy.
1. TAV Havalimanlari Holding A.S. (OTC:TAVHY)
Number of Hedge Fund Holders: N/A
Average Analyst Price Target Upside: -64.5%
TAV Havalimanlari Holding A.S. (OTC:TAVHY) is a Turkish company that is a significant player in airport operations. It currently manages 15 airports across eight countries, including Croatia, Georgia, Saudi Arabia, and Kazakhstan.
According to the company, it has over 300 partner airlines, a footprint in 33 countries, and employs close to 40,000 people. In 2023, it served 96 million passengers. The company was covered by 9 analysts with an average price target of $10.2 as of September 26. The average price target implies a downside of 64.5%. It tops our list of worst airport stocks to buy.
Despite that, TAV Havalimanlari (OTC:TAVHY) is a fundamentally strong company and has a comprehensive plan to improve its services and overall quality with “2025 Pioneers.” It is the company owner, Groupe ADP’s initiative integrated into the company’s strategy. According to it, the company is focused on sustainability, innovation, and growth, and is aiming to achieve carbon neutrality by 2030 and net-zero emissions by 2050.
Some of the major goals include improving flight punctuality, integrating biometric systems for 50% of passengers, and enhancing hospitality with a target Airport Service Quality (ASQ) score of 4+ for major airports.
In the first half of 2024, TAV Havalimanlari (OTC:TAVHY) served 46 million passengers, marking a 17% increase, with international traffic up 20%. Revenue grew 31% to €732 million, EBITDA rose 47% to €215 million, and net income reached €81 million.
While we acknowledge the potential of TAV Havalimanlari Holding A.S. (OTC:TAVHY) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TAVHY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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