We recently published a list of 12 Best Airport Stocks to Invest in Now. In this article, we are going to take a look at where Blade Air Mobility, Inc. (NASDAQ:BLDE) stands against other best airport stocks to invest in now.
Prior to the pandemic, the travel and tourism industry contributed 10.4% of GDP (US$10.3 trillion) and 10.5% of all jobs (334 million), making it a vital sector of the global economy. The industry’s contribution to global GDP in 2023 was 9.1%, up 23.2% from 2022 and just 4.1% below 2019 levels, according to WTTC‘s most recent research. Domestic visitor expenditure increased by 18.1%, surpassing 2019 levels, while employment increased by 27 million jobs, a 9.1% year-over-year gain. Spending by foreign visitors increased by 33.1%, but it was still 14.4% less than before the outbreak.
Julia Simpson, WTTC President & CEO, on April 2024, stated:
“The future is very bright. We can predict a record-breaking 2024. The sector’s global economic contribution is set to reach an all-time high of $11.1 trillion, which will generate one in every ten dollars worldwide. The sector is also expected to support nearly 348 million jobs, an increase of 13.6 million jobs on its 2019 record. We trust that our data will support policymakers, industry professionals and individuals engaged in the evolution of travel.”
According to Fortune Business Insights, in 2024, the size of the global market for airport services was valued at $196.96 billion. The market is expected to increase at a compound annual growth rate of 14.4% from $222.26 billion in 2025 to $570.12 billion by 2032. In 2024, North America held a 28.98% market share, dominating the airport services industry. Furthermore, it is projected that the airport services market in the United States will expand considerably, reaching an estimated value of $130.37 billion by 2032. This growth will be fueled by a rise in air and passenger traffic as well as cargo transportation.
According to S&P’s report, the worldwide travel retail sector is expected to expand by 7%-10% between 2024 and 2025, greatly above the 3.3% and 3.2% growth in the global GDP in 2024 and 2025, respectively. Sales won’t approach 2019 levels until 2025, but air traffic will surpass pre-pandemic levels in 2024. Growth will be driven by Asia-Pacific, helped by better infrastructure and a growing middle class. Duty-free shopping, however, might be slowed by declining consumer confidence and fewer business tourists.
As per the aforementioned report, over the next two to four years, it is anticipated that global air traffic will increase more quickly than GDP due to growing middle classes in Asia-Pacific and, to a lesser extent, Latin America, as well as better infrastructure and connectivity. By incorporating technology, personalization, and hybrid stores that blend duty-free shopping with dining options and entertainment, travel businesses are adjusting. Customer experiences are also being improved by a move toward luxury items, fashion, electronics, and regional merchandise. More passenger time will be available for shopping because of increased digitization, remote check-in, and bag-drop services. However, sector profits are under pressure from growing airport concession fees, which have leveled off at higher levels since the pandemic. Chinese operators have secured reduced concession rates, giving them a competitive edge, even though the majority of travel shops would see a rise in expenses.
Looking ahead, according to Deloitte’s report, in 2025, travel demand is projected to be high due to post-pandemic lifestyle changes, greater freedom in working remotely, and a promising economic outlook. TSA throughput climbed by 7% year over year between December 20 and January 5 as a result of US tourists planning longer and more costly travels during the recent winter holiday season. A post-pandemic reprioritization, with 40% of travelers raising their holiday budgets because travel has become more important, and the growing trend of “laptop lugging,” where half of passengers want to work remotely while traveling, are important factors. Travel expenditure was also supported by the fact that the percentage of Americans who reported an improved financial situation jumped from 31% to 37%. Travel agencies need to adjust to new AI applications, changing global travel patterns, increased service offerings, and possible regulatory changes under a new administration to meet this demand.
A helicopter in flight over the skyline of a major city.
Methodology
We sifted through holdings of airport services ETFs and online rankings to form an initial list of 20 airport stocks. From the resultant dataset, we chose 12 stocks with the highest number of hedge fund investors, using Insider Monkey’s database of 900 hedge funds in Q3 2024 to gauge hedge fund sentiment for stocks. We have used the stock’s market capitalization as of February 12 for stocks that are trading under OTC.
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).
Blade Air Mobility, Inc. (NASDAQ:BLDE)
Number of Hedge Fund Holders: 11
A technology-driven air mobility platform, Blade Air Mobility, Inc. (NASDAQ:BLDE) offers helicopter and fixed-wing services primarily in the Northeast United States, Southern Europe, and Western Canada. It also handles hospital air transportation and logistics, as well as the transportation of human organs for transplantation and passengers. Medical and Passenger are the company’s two operating segments. The company’s medical division, which primarily comprises the transportation of human organs for transplantation and the medical teams who support these services, generates the majority of its revenue. Coordination of donor logistics and assistance in assessing possible donor organs are among its other functions. The United States accounts for a sizable amount of the company’s revenue.
Blade Air Mobility, Inc. (NASDAQ:BLDE) is positioned for long-term growth as a result of its shift to positive cash flow and higher profit margins. Higher profitability has resulted from the company’s successful exit from low-margin operations, especially in its passenger division. It is getting closer to breakeven on a GAAP basis as adjusted EBITDA starts to turn positive, and a double-digit EBITDA margin is anticipated in 2025. With $136 million in cash and no debt, its solid balance sheet offers room for future share repurchases and additional investments in its fleet of medical aircraft. Furthermore, the company’s medical transport business, which is projected to grow at a double-digit rate in 2025, benefits greatly from the expanding organ transplant industry, which is strengthened by legislation reforms and advancements in perfusion technology.
The development of eVTOL (electric vertical takeoff and landing) aircraft has the potential to transform urban air travel and greatly improve Blade Air Mobility, Inc. (NASDAQ:BLDE)’s passenger operations in the long run. Although widespread adoption of eVTOL is still a few years away, the business has a competitive advantage due to its early positioning in this market. Its medical logistics division is strengthened by its strategic alliance with OrganOx, which raises the prospect of further revenue growth.
Overall, BLDE ranks 3rd on our list of Best Airport Stocks to Invest in Now. While we acknowledge the potential for BLDE to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BLDE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.