Given the global pandemic and all the travel restrictions that brought, it’s unsurprising that the two biggest commercial aircraft manufacturers have seen significant drops in their stock prices over the last 12 months. It would be easy to overlook both these companies as investment opportunities, given the state of air travel in the world now. And while there is no doubt it will take a good few years before either of these heavyweights is back to their pre-COVID fighting form, the question any prospective investor should be asking themselves is whether the worst is behind them yet? Investment fundamentals say, “buy low, sell high”. So why not buy when two massive companies are at the lowest they’ve been for years?

With mass vaccination on the horizon, the argument could be made that the bottom is almost here. Travel restrictions will be eased. Demand for air travel will return. Airbus and Boeing will, in all likelihood, recover.

Even prior to COVID Boeing had some problems given the high-profile crashes of 2 of their 737 Max aircraft and the subsequent grounding of the entire product line. The 737 Max is now recertified for flying in North America, Brazil, the UK, and the EU providing some source of hope as the backlog of stock can start to be shifted. This news is not without a pinch of salt however, the crashes are still relatively recent in the general public’s memory. Also, questions have been raised about how rigorous the recertifications were, given how quickly the line has been reapproved.

In contrast, Airbus has had a relatively optimistic last 12 months given dire circumstances. They slightly exceeded projections for aircraft delivery (566 delivered on a projection of 560) and they appeared to have kept up with the shift in airline demand away from wide-body aircraft. Over 80% of deliveries made were either A220s or A320s (both narrow body lines). 

As for the case of which to back, like any equity, investors should take their time to conduct some independent research and form their own opinions, especially when it comes to long term investments such as these. Recent history would suggest Airbus may recover more quickly indicating a safer bet, however, the dip may be deeper for Boeing suggesting a higher risk maybe with a higher reward.