Source : showbizcast

Airline stocks represent ownership in companies that operate commercial flights, transporting passengers and cargo across the globe. These stocks are influenced by a myriad of factors, including economic conditions, fuel prices, regulatory changes, and global travel trends.

As one of the critical components of the broader transportation sector, airline stocks can be subject to both short-term market fluctuations and long-term industry trends, making them a unique and complex investment option. This article will guide you through some of the best airline stocks you should invest in.

1. Delta Air Lines (DAL)

Source : nasdaq

One of the best airlines stocks to buy is Delta Air Lines (DAL). Delta boasts a reputation for on-time performance, operational efficiency, and a focus on customer experience. This dedication to quality translates to passenger loyalty and brand trust. 

Delta delivered a stellar 2023, exceeding earnings expectations and achieving a 95% increase in EPS. Despite a slight dip in Q4 2023, analysts remain optimistic about future growth, with revenue projections up almost 19% for 2024.

  • Market capitalization: $24.51 billion

2. United Airlines Holdings (UAL)

Source : nasdaq

UAL has a lower price-to-earnings ratio (P/E) and price-to-sales ratio, making it relatively undervalued. This could attract value investors seeking bargains. The company's top line is also healthy, with revenue growing at 28.8% year-over-year, reaching $52 billion in the past twelve months.

United is actively investing in technology to enhance operational efficiency and customer experience. Their adoption of artificial intelligence for revenue management and self-service kiosks at airports streamlines operations and reduces costs.

  • Market capitalization: $12.42 Billion

3. American Airlines Group (AAL)

Source : nasdaq

AAL stands out among the best airline stocks with a strong domestic network and brand recognition, solidifying its position as the world's largest airline by passenger revenue. This dominant position translates to significant market share and pricing power.

Following pandemic losses, AAL has shown signs of a strong comeback. Q3 2023 saw revenue surpassing pre-pandemic levels, and passenger demand continues to rise. This indicates a potential for significant profit growth as travel normalizes.

  • Market capitalization: $8.94 billion

4. Spirit Airlines (SAVE)

Source : nasdaq

Spirit Airlines is an American ultra-low-cost carrier (ULCC) headquartered in Miramar, Florida. It is the eighth-largest airline in the United States by passengers carried and the largest ULCC in the country.

Spirit is a well-established budget carrier with loyal customers. Rumors of a potential merger with Frontier could unlock synergy and market share gains. While the current market conditions pose some risks, the company's strong demand, cost-cutting measures, and growth potential could lead to long-term success.

  • Market capitalization: $0.62 billion

5. Ryanair Holdings (RYAAY)

Source : nasdaq

This Europe's leading budget airline has shown remarkable resilience in bouncing back, and its stock is now reflecting this renewed optimism. TipRanks gives RYAAY a neutral rating based on 5 analyst recommendations. The average price target is $132.33, suggesting potential upside.

The company beat analyst expectations in its latest earnings report (November 2023), reporting earnings per share of $8.535 compared to an estimate of $7.978. This indicates strong financial performance despite ongoing challenges.

  • Market capitalization: $22.85 billion 

6. Allegiant Travel (ALGT)

Source : nasdaq

Allegiant Travel (ALGT), known for its ultra-low-cost fares and point-to-point routes, has seen its stock take flight in recent months. Allegiant caters to a budget-conscious traveler segment, which tends to be less affected by economic fluctuations.

After a tumultuous 2022, with highs of $130 and lows of $54, ALGT has climbed steadily since September 2023, currently hovering around $76. Revenue surpassed $600 million, with earnings per share reaching $3.14, a significant jump from the previous year.

  • Market capitalization: $1.37 billion

7. Copa Holdings (CPA)

Source : nasdaq

CPA is among the best airline stocks to buy. It is the parent company of Panamanian airline Copa Airlines and has been a strong performer in the aviation sector. This reputation allows them to command premium fares and attract loyal customers.

Copa has consistently reported strong financial results, boasting high operational margins and healthy profitability. Revenue and passenger numbers have steadily increased, showcasing their resilient business model.

  • Market capitalization: $3.82 billion

8. Southwest Airlines (LUV)

Source : nasdaq

Southwest Airlines (LUVV )is an American low-cost carrier that has its headquarters in Dallas and the airline is known for its low fares and relaxed customer service policies without any frills like assigned seating or free meals on board.

The company still boasts a healthy balance sheet, low debt, and a consistent dividend yield of around 2.56%. This financial stability provides a buffer against short-term turbulence.

  • Market capitalization: $17.81 billion

9. Frontier Airlines (ULCC)

Source : nasdaq

Frontier Airlines the ultra-low-cost carrier known for its "Low Fares Done Right" motto, has seen its fair share of turbulence in the stock market recently. This large-cap stock presents a mixed bag for investors.

The airline boasts one of the youngest and most fuel-efficient fleets in the US, which could provide a cost advantage over competitors in the long run. Frontier's market cap stands at around $1 billion, reflecting a smaller presence compared to major airlines. 

  • Market capitalization: $1.04 billion

10. Alaska Airlines (ALK)

Source : nasdaq

Alaska Airlines (ALK) is a major American airline headquartered in Seattle, Washington. The airline is known for its extensive network in the United States, with a focus on routes to and from the West Coast.

Alaska's recent acquisition of Hawaiian Airlines expands its reach and market share, particularly in the lucrative Pacific leisure market. This could lead to cost synergies, increased revenue streams, and a stronger competitive position. While the recent surge has been encouraging, potential headwinds from fuel costs, labor challenges, and competition should be carefully considered. 

  • Market capitalization: $4.30 billion

11. JetBlue Airways (JBLU)

Source : nasdaq

JetBlue Airways (JBLU) is synonymous with affordable and comfortable air travel in the US. There are strong arguments to be made for AAL as a compelling investment in 2024, especially for those seeking value and potential for growth.

AAL is strategically expanding its international network, particularly in Latin America and the Caribbean, leveraging its strong partnerships and hub system. The company is not yet profitable, with a trailing twelve-month EPS of -$0.56. However, its revenue steadily increased, reaching $9.7 billion in the TTM period.

  • Market capitalization: $1.68 billion

12. Azul S.A. American Depositary Shares(AZUL)

Source : nasdaq

Founded in 2008, Azul has established itself as the third-largest airline in Brazil by passengers carried, focusing on low-cost, point-to-point domestic routes. The company boasts a modern fleet of fuel-efficient Airbus A320neo and Embraer E195-E2 jets.

The Brazilian airline holding company has captured the attention of investors with its AZUL American Depositary Shares (ADS) on the Nasdaq. AZUL has experienced significant growth over the past years, with its stock price more than doubling since the start of 2023.

  • Market capitalization: $854.83 million

13. SkyWest Airlines (SKYW)

Source : nasdaq

It is a holding company for two principal subsidiaries: SkyWest Airlines, which operates regional air services for major airlines like United Airlines and Delta Air Lines, and SkyWest Leasing.

The small-cap stock has a market capitalization of $2 billion. This makes it a potentially more volatile option compared to larger airline stocks. Its forward P/E of 10.94 suggests investors anticipate a return to profitability. Analysts expect profitability to improve significantly in 2023 and 2024 as the pilot shortage eases.

  • Market capitalization: $2.03 billion

14. Sun Country Airlines (SNCY)

Source : nasdaq

Sun Country Airlines (SNCY) has been navigating choppy skies in recent years, but with the travel industry showing signs of recovery, investors are taking a renewed interest in this budget airline.

SNCY currently boasts a market capitalization of approximately $697 million. It reported its highest third-quarter revenue ever at $249 million, with GAAP diluted EPS of $0.13 and operating income of $19 million. Adjusted metrics were even better, with an EPS of $0.14 and an operating income of $20 million.

  • Market capitalization: $0.66 billion

15. Hawaiian Holdings (HA)

Source : nasdaq

Serving the beautiful Hawaiian islands and beyond, Hawaiian Holdings, Inc. (HA) is the parent company of Hawaiian Airlines. Its market cap stands at approximately $1.77 billion. This places it in the small-cap category of the US stock market.

HA has seen a positive trend in recent months. Following a low of $3.70 in 2023, the stock has climbed steadily, reaching a 52-week high of $14.71 on January 4, 2024. However, it has experienced some volatility since then, currently trading around $13.30.

  • Market capitalization: $711.03 million