Its fleet is also expanding. US Airways Group Inc (NYSE:LCC) priced an offering of $100 million in trust certificates to pay for two Airbus aircraft that were delivered in June. Further, the carrier plans to finance seven Airbus aircraft, scheduled to be delivered between June 2013 and October 2013.
Aircraft makers may also perform well
Provided that airlines continue enjoying strong passenger traffic, aircraft manufacturers such as The Boeing Company (NYSE:BA) may be poised for growth, too. Several companies, including United Continental Holdings, have placed large orders for the flagship aircraft, B787 “Dreamliner”
In the second quarter of 2013, United increased the order of Dreamliners to 65, and it will be the first North American customer of the B787-10. In addition, the company also converted its existing order of 25 A350-900s to A350-1000s, and added 10 more aircraft.
Dreamliner orders should continue to come in strong for The Boeing Company (NYSE:BA), provided that the aircraft is not involved in any serious incidents. Investors remember that these aircraft were grounded from January to April due to a problem with the Lithium-ion battery, and another aircraft caught fire at the London Heathrow Airport in June.
From a financial standing, The Boeing Company (NYSE:BA) posted a 9% increase in revenue totaling $21.8 billion for the second quarter of 2013, compared to the same quarter a year ago. Its net income rose by 13% to $1.08 billion, or $1.41 per share, from $967 million, or $1.27 per share.
My two cents
Airlines are experiencing strong passenger traffic, so your portfolio should be exposed to the sector. Delta Air Lines, Inc. (NYSE:DAL) and US Airways Group Inc (NYSE:LCC) offer an interesting investment opportunity and they may be good additions to your portfolio.
Delta is expanding operations into South America by forming a partnership with GOL Linhas Aereas. Further, the inauguration of the new terminals at JFK and LAX should be beneficial for the company’s growth goals.
US Airways Group Inc (NYSE:LCC) is seeing strong passenger traffic in its international and Latin American markets. Further, the carrier is also expanding operations to Sao Paulo, which seems to be a top destination because of its economic importance. Lastly, the carrier is showing signs of growth with the acquisition of new aircraft. Overall, its revenue should increase in the interim.
Lastly, The Boeing Company (NYSE:BA) should continue to experience strong aircraft orders since airlines across the board have stronger passenger traffic that must be met with the addition of new flights. The Dreamliner should increase Boeing’s revenue substantially in the future. Furthermore, in the previous quarter, the company posted a strong balance sheet that should improve over time.
For these reasons, I recommend these companies as strong buys.
Robinson Roacho has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Robinson is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article 1 Reason to Invest in These Airlines originally appeared on Fool.com is written by Robinson Roacho.
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