April 21st, 2023 | 07:10 CEST
Airbus, Lufthansa, Star Navigation Systems - Which share will take off?
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At home in Southern Germany, the passionate stock exchange expert has been accompanying the capital markets for about twenty years. With a soft spot for smaller companies, he is constantly on the lookout for exciting investment stories.
Airbus: Benefits only partially from special economic situation
Firstly, the European manufacturer has gained ground against Boeing in recent years, mainly due to the efficiency of its airplanes, which has convinced customers. The past quarterly reports have all shown solid growth in the high single-digit range. Europe remains Airbus' strongest sales region, followed by the Asia-Pacific region. In addition to the commercial aircraft business, Airbus also generates significant revenues in the defence and space sectors, accounting for around one-fifth of its business.
For this reason, too, investors could see the Airbus share as a beneficiary of the current circumstances. However, the share is performing rather sluggishly. Sanctions against Russia have hampered planned rocket launches under the Soyuz programme, and the supply of titanium, which Airbus has sourced from Russia in the past, has also stuttered. Nevertheless, Airbus remains a solid company of considerable size that is likely to put these problems behind it. However, the blue-chip, which currently offers only a small dividend of EUR 1.80 per share, is not particularly attractive.
Lufthansa: Still lagging behind
At Lufthansa, too, things currently look anything but rosy. Although the chances of acquiring a stake in the Portuguese airline TAP are good, Lufthansa is struggling with profitability. After the end of the pandemic had boosted the figures, overflight bans due to the Ukraine war resulted in high costs. New aircraft are now to be introduced to modernize the fleet and reduce costs. The primary beneficiary is Airbus, which is to deliver 10 A350-1000s and 5 Airbus A350-900s. Lufthansa is not out of the woods yet. While this offers potential, the share has yet to ignite.
Star Navigation Systems: Analysis of flight data as a cost reducer
One company that wants to help airlines with cost pressures is Star Navigation Systems. The Company offers airlines real-time data analysis for their aircraft. Until now, operators of aircraft fleets have been dependent on data being read from the flight recorder after landing. The first signs of minor defects or the need for unscheduled maintenance are overlooked, or there is no opportunity for immediate action due to the tight schedule. The Star-ISMS from Star Navigation Systems sends data from the aircraft to the airline in real-time and draws attention to abnormalities.
In this way, airlines should be able to plan maintenance better and implement measures more effectively, for example, by using available rest periods for aircraft and crew for maintenance that would have been due sooner or later anyway, which the Star Navigation solution has already recognized. The Company relies on a subscription model for its product. Customers can therefore try out the solution and gradually equip their aircraft. Ultimately, this should result in advantages for the entire fleet, for example, through synergy effects. In return, Star Navigation Systems benefits from a steady cash flow thanks to the subscriptions. Although the Company is still in its infancy, the Canadians' solutions cover all current passenger aircraft. They can be a solution that reduces costs and increases safety in times of cost pressure in the aviation industry. The share is a flawless penny stock with all the associated opportunities and risks. To strengthen market confidence, the management of Star Navigation Systems has self-imposed a trading ban on its own shares: 25% of the outstanding shares are now subject to a holding requirement. The stock is a case for the watchlist. If it succeeds in convincing major airlines, the chances are great.
There are various ways to profit from the comeback of aviation. The Lufthansa share seems to be the least attractive at the moment. Airbus, on the other hand, scores with economical aircraft and a solid market position. However, with its aircraft-independent analysis of live flight data, the solution provider Star Navigation Systems also exudes fantasy. Since major airlines have not yet jumped on board, the share must be considered speculative. However, the potential is excellent in the case of success.
Conflict of interest
Pursuant to §85 of the German Securities Trading Act (WpHG), we point out that Apaton Finance GmbH as well as partners, authors or employees of Apaton Finance GmbH (hereinafter referred to as "Relevant Persons") may hold shares or other financial instruments of the aforementioned companies in the future or may bet on rising or falling prices and thus a conflict of interest may arise in the future. The Relevant Persons reserve the right to buy or sell shares or other financial instruments of the Company at any time (hereinafter each a "Transaction"). Transactions may, under certain circumstances, influence the respective price of the shares or other financial instruments of the Company.
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