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The BITA Airlines and Airports Giants Index (BNAAGI) is the definitive benchmark stock index for companies classified as providers of airline and airport services which are listed on the top US and Canada stock exchanges. The index is designed to track the overall performance of 24 (at the time of writing) stocks of companies that derive over 80% of their revenues by operating airport and airline services. BNAAGI was launched on November 27th by BITA, a reputable German-based FinTech company, which also maintains the index.
Airlines and Airports Giants Index launched with a value of 1000 at inception. This period coincided with the changing fortunes in the aviation industry, after months of turmoil following the start of the coronavirus pandemic that literally shut down the industry. BNAAGI initially defended the 1000 price handle, but by January 2021, it dipped below it to print a low at circa 960. But the level proved to be a support area, and by March 2021, the index rallied to an all-time high of above 1320. It then retraced from those highs and continued to trade above 1200 as of April 2021.
Index Composition and Calculation
The Airlines and Airports Giants Index is a free-float market-capitalisation-weighted index calculated using the standard Laspeyres formula. A free float index takes into account only outstanding shares held by the public, and it is market capitalisation that determines inclusion into the BNAAGI. The index has a capping factor of 9%. The capping factor limits the weight of any one individual constituent. There is also a unique divisor applied to maintain the continuity of the index’s value across corporate actions such as mergers, takeovers, and acquisitions. The index is calculated up to 13 decimal places for accuracy purposes but rounded off to 2 decimal places for publishing, storage, and dissemination purposes.
To be included in BNAAGI, constituents a company must meet the following:
- It must be listed and traded on a recognised stock exchange in the US or Canada, having met all the strict conditions.
- It must have a minimum market capitalisation of $100 million.
- It must have a minimum daily traded value (ADTV) of $500,000 over the last 3 months.
- It must derive a minimum of 80% of its revenues by operating airline and airport services.
Here are the current top 10 constituents of BNAAGI as of April 2021:
|Ryanair Spn 1for5 ADR||9.31%|
|Delta Air Lines||9.21%|
|Alaska Air Group||9.03%|
|American Airlines Group||8.96%|
|United Airlines Holdings||8.94%|
|Air Canada Voting and Variable Voting||7.76%|
|Grupo Aeroportuario Del Pacifico Sr.B 1for10 ADR||3.65%|
|Spirit Airlines Inc||3.62%|
Factors Influencing the Price of BNAAGI
Airlines are a vital cog of the economy, but the stocks of their companies have traditionally been dull performers. Over the years, the companies have had to perform strategic mergers and partnerships to sustain their operations. Airline stocks have always been cyclical, rising and falling according to underlying global economic conditions. Numerous metrics determine economic conditions, such as labour data, corporate profits, and disposable incomes. Alongside economic conditions, airline stocks are also impacted by other factors such as airfares, fuel costs, capacity utilisation, and actual air traffic.
The airline and airport industry were some of the worst-hit during the COVID-19 pandemic in 2020. With travel restricted, airline and airport companies had to bear hefty maintenance costs with virtually no revenue coming in. But towards the end of 2020, the positive news of vaccinations and the lifting of travel bans and restrictions provided a reprieve for the industry. Recovery will, of course, take time, but passenger volumes, as well as other drivers of revenues for these companies, will likely increase.
Why Trade BITA Airlines and Airports Giants Index CFDs
BNAAGI only considers the top 24 companies listed on the US and Canada exchanges as operators of airline and airport services. This guarantees the liquidity of the index at all times.
- Stable Price Action.
The high liquidity of BNAAGI, as well as its computation, ensures that its price action is stable and predictable most of the time, except in unusual crisis moments.
- Vast News Coverage.
As the benchmark stock market index for the important aviation industry, BNAAGI benefits from massive media attention. This helps investors to always be updated on major fundamental and technical developments in the price of the index.
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