In this article, we will take a look at the 11 Best Airline Stocks to Buy Now.
The global airline industry was hit worse than most other industries by the COVID-19 pandemic. According to McKinsey, the industry’s revenue in 2020 was $328 billion, representing a revenue loss of more than $370 billion over 2019. However, the industry has progressively rebounded in recent years and is expected to rise steadily as international travel returns worldwide.
Back in 2023, the aviation value chain seemed encouraging compared to a couple of years prior. Jet fuel manufacturers, who profited from higher gasoline prices, and freight forwarders, having continued to enjoy robust air cargo demand, made the most money. On the other hand, airports, airlines, and OEMs faced the biggest losses in absolute terms. That said, the aggregate results, boosted by the continued recovery in air travel, were a substantial improvement over 2022, when economic losses across the entire chain reached almost $67 billion. On that front, McKinsey stated that 9 of the 11 subsectors the firm analyzed did better in 2023 than in 2022, and 6 of the 11 performed better than in 2019. Furthermore, according to a UN Tourism study released in January 2024, international tourism reached 88% of pre-pandemic levels in 2023 and was on course to rebound to levels before the pandemic.
Airline Industry Outlook
The US airline sector began 2025 operating at greater than pre-pandemic levels, with demand showing a strong rebound in 2024 and early 2025. According to Bain & Company’s Q1 2025 air travel forecasts, annual air travel demand has surpassed 2019 totals based on revenue passenger kilometers. This recovery marked a significant milestone, with 2024 travel demand surpassing 102.6% of 2019 levels. However, new data shows that this trend seems to have reversed on account of heightened inflation and safety concerns. The market has already begun reflecting this change, with the S&P 500 passenger airline index down about 20.8% year-to-date.
All that said, the future holds a bit more promise. By 2030, the US is expected to replace the UK as the world’s largest outbound travel market, thanks to a spike of 21 million extra visitors between 2024 and 2030. Meanwhile, China is expected to reclaim its position as the third-largest outbound travel market, up from 7th place in 2024, with an increase of more than 26 million travelers. Furthermore, the Airports Council International (ACI) predicts that global passenger traffic would rise at a compound annual growth rate of 3.4% between 2024 and 2043, reaching 17.7 billion people. By 2045, these numbers are predicted to increase to 18.7 billion, nearly double those in 2024. Looking even beyond that, passenger traffic is expected to hit the 22.3 billion mark by 2053, about 2.4 times the 2024 prediction.
Pixabay/Public Domain
Our Methodology
For our list of the 11 best airline stocks to buy, we noted down stocks that were involved in the airline industry and then selected the top 11 companies that operated in that space. We used ETFs, financial media reports, and stock screeners to compile a preliminary list. We arranged the chosen companies in ascending order of hedge fund ownership as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
11. Allegiant Travel Company (NASDAQ:ALGT)
Number of Hedge Fund Holders: 20
Allegiant Travel Company (NASDAQ:ALGT) is an airline holding and hotel company based in Las Vegas, Nevada. The company provides aircraft transportation, automobile rentals, hotel reservations, and other travel services. It also owns Allegiant Air, an American airline that flies leisure travelers.
On March 20, UBS analyst Thomas Wadewitz lowered his price target for Allegiant Travel Company (NASDAQ:ALGT) shares to $61 from $93, while maintaining a Neutral rating. Wadewitz’s judgment came after a succession of airline presentations and statements that suggested a decline in first-quarter trends, with consumer weakness projected to last beyond the quarter.
Allegiant Travel Company recently disclosed fourth-quarter 2024 results that came above analyst estimates, with earnings per share of $2.10 versus a prediction of $1.19. The company’s revenues also crossed projections, reaching $627.7 million.
10. Frontier Group Holdings Inc. (NASDAQ:ULCC)
Number of Hedge Fund Holders: 22
Frontier Group Holdings, Inc. (NASDAQ:ULCC) is an American ultra-low-cost carrier based in Colorado that offers flights to over 120 destinations throughout the Americas. The company’s business model is based on low prices, extra fees for optional services, and a streamlined operation to enhance efficiency.
Citi analyst Stephen Trent resumed coverage of Frontier Group Holdings, Inc. (NASDAQ:ULCC) on March 20, giving a Neutral rating and a $7.25 price target. Trent highlighted that Frontier’s operational performance has improved in comparison to its bargain airline competitors, including the development of a minor amount of positive free cash flow. The analyst said that, while Frontier is performing well, tax credits are playing an important part in its earnings growth. He also expresses concern about the airline’s future spending and capacity to remain profitable in the face of impending tariff and labor cost pressures.
Frontier Group Holdings, Inc. (NASDAQ:ULCC) announced strong fourth-quarter 2024 earnings of $0.23 per share, far above the projected $0.04. The airline also had a 12% year-over-year revenue rise, surpassing $1 billion in the quarter.
9. Ryanair Holdings plc (NASDAQ:RYAAY)
Number of Hedge Fund Holders: 23
Ryanair Holdings plc (NASDAQ:RYAAY) is a low-cost airline company that offers short distance, point-to-point travel across Europe and North Africa. It operates through five seperate airlines, which include Ryanair DAC, Lauda, Malta Air, Buzz, and Ryanair UK.
Bernstein analysts reaffirmed their favorable outlook on Ryanair Holdings plc (NASDAQ:RYAAY) on March 12, maintaining an Outperform rating and a €23.50 price target on the company. The analysts noted the airline’s long-term performance and its transformation from a high-growth firm to one focused on cash returns. Bernstein analysts also noted that Ryanair has been the best-performing stock in the European aviation industry over the long run. Furthermore, the airline’s financial health is strong, with annual free cash flow expected to be between €2-€2.5 billion. Ryanair’s balance sheet already shows a net cash position, and it has no defined benefit pension commitments. The company intends to maintain €3-4 billion in gross cash and reduce gross debt to hedge against economic downturns and position itself for counter-cyclical initiatives.
Conventum – Alluvium Global Fund stated the following regarding Ryanair Holdings plc (NASDAQ:RYAAY) in its Q4 2024 investor letter:
“Ryanair Holdings plc (NASDAQ:RYAAY), the European budget airline, was up 15.8%. The same theme continues – its business expansion is being hindered by Boeing delivery delays and it reduced its short term passenger growth guidance. It is not a lone ranger. All airlines, irrespective of their aircraft preferences, are affected by similar (or worse) delays. And although it receives some compensation, it is hardly enough to cover business disruption cost, for example paying for idle trained crew. (Pleasingly, in early January Ryanair announced it would take delivery of 29 new aircraft in 2025 – which was marginally above expectations). Meanwhile, its lowest cost position is only strengthening, it is continuing deals with the online travel agents which provide greater customer access, there are possibilities it may enter the package holiday segment (providing additional income streams), and its cash generation is fuelling share buybacks. All up, notwithstanding the growth setbacks from delivery delays, we are increasingly positive. We have adjusted our longer term maintainable earnings estimates to reflect greater contribution from auxiliary spending, and fewer shares outstanding, which leads us to a higher valuation. We bought a little during the quarter, such that at 6.4% of the Fund, our position now falls into the “greater than 5%” cohort of allowable investments (which we are comfortable with).”
8. Sun Country Airlines Holdings Inc (NASDAQ:SNCY)
Number of Hedge Fund Holders: 27
Sun Country Airlines Holdings, Inc. (NASDAQ:SNCY) runs low-cost airlines that operate in two segments: cargo and passengers. The company has operations primarily in the United States while also expanding into Latin America. Notably, it has a fleet of 44 passenger aircraft and 20 freighters that serve a variety of customers, including leisure travelers, cargo clients, and military services.
The airline exceeded earnings per share forecasts in Q4 2024, reporting $0.20 compared to a projection of $0.1888. The company also announced total revenues of $260.4 million in Q4, a 6.1% rise year-over-year, but somewhat lower than the expected $257.29 million.
Looking ahead, Sun Country Airlines Holdings, Inc. (NASDAQ:SNCY) expects Q1 2025 revenue to range between $330 million and $340 million, with an operating margin of 17-21%. The company also plans to expand its fleet with eight more Amazon planes, an addition that is expected to provide a decent boost in cargo income.
7. JetBlue Airways Corporation (NASDAQ:JBLU)
Number of Hedge Fund Holders: 33
JetBlue Airways Corporation (NASDAQ:JBLU) is a well-known American low-cost carrier. The airline, headquartered in New York, operates flights to over 100 locations in the United States, the Caribbean and Latin America, Canada, and Europe. The company is renowned for its emphasis on customer happiness, which includes offering amenities like in-flight entertainment while keeping a low ticket cost.
Following the airline’s fourth-quarter results release, Raymond James analyst Savanthi Syth reiterated a Market Perform rating on JetBlue Airways (NASDAQ:JBLU). Syth said that JetBlue’s fourth-quarter revenue reached the upper end of the company’s projections, with adjusted earnings per share marginally exceeding consensus predictions but falling short of Raymond James’ expectations owing to higher non-operational expenditures. The analyst also added that JetBlue’s conservative estimates for 2025 may be due to the airline’s comparitively small exposure to major business travel and rising competition capacity challenges.
6. Southwest Airlines Co. (NYSE:LUV)
Number of Hedge Fund Holders: 34
Southwest Airlines Co (NYSE:LUV) is a prominent American airline that also operates as one of the world’s leading low-cost airlines. The company offers passenger airline services via its fleet of approximately 718 aircraft that fly to 121 locations across the globe.
On March 20, Melius Research analyst Conor Cunningham upgraded Southwest Airlines Co.’s (NYSE:LUV) shares from Sell to Hold, raising the price target to $34 from $28. The change came as the stock exhibited excellent momentum, with a 17% rise in the previous six months. Cunningham stated that after three years of underperformance relative to its rivals, 2025 might be a watershed moment for Southwest as the company’s self-help programs begin to stabilize its performance.
Southwest Airlines Co (NYSE:LUV) recently made modifications to its loyalty program and price structure, which will take effect for tickets booked beginning May 28, 2025, to increase revenue growth. In addition, the company has extended its distribution channels through a relationship with Expedia and aims to launch a new Basic fare category.
5. SkyWest, Inc. (NASDAQ:SKYW)
Number of Hedge Fund Holders: 34
SkyWest, Inc. (NASDAQ:SKYW) is a regional airline company in the US with a varied portfolio, including SkyWest Airlines, SkyWest Charter, and SkyWest Leasing. The company boasts a fleet of over 500 aircraft, linking travelers to over 240 destinations. Furthermore, the company rents aircraft to other operators through SkyWest Leasing, which increases its income possibilities.
SkyWest, Inc. (NASDAQ:SKYW) reported earnings per share of $2.34 in Q4 2024, considerably above expert expectations of $1.80. Revenue totaled $944 million, above the average estimate of $907.54 million, indicating a 26% rise from $752 million in the same period the previous year. Moreover, the company’s block hour output increased by 20% year-over-year in Q4, indicating improved captain availability compared to the prior year quarter.
In addition, the company announced a contract renewal with American Airlines for 74 CRJ700 aircraft over a multi-year period. On that front, 16 additional E-175s are planned to arrive between 2025 and 2026, allowing SkyWest, Inc. (NASDAQ:SKYW) to operate a total of 278 E-175s by 2026.
ClearBridge Small Cap Value Strategy stated the following regarding SkyWest, Inc. (NASDAQ:SKYW) in its Q2 2024 investor letter:
“We also added a new position in SkyWest, Inc. (NASDAQ:SKYW), a regional airline operator. The company reported strong quarterly earnings as its pilot attrition declines and fleet utilization improves. We believe that SkyWest continues to find opportunities to deploy capital in a value-accretive manner, acquiring more planes under long-term contracts. We think earnings should hold up in a potential recession and perhaps even improve further if major airlines reduce capacity and more pilots become available for SkyWest.”
4. Alaska Air Group, Inc. (NYSE:ALK)
Number of Hedge Fund Holders: 45
Washington-based Alaska Air Group, Inc. (NYSE:ALK) is an airline holding company that offers flight services to passengers through three divisions: Alaska Mainline, Alaska Regional, and Horizon Air.
On March 20, UBS analyst Thomas Wadewitz cut Alaska Air Group, Inc.’s (NYSE:ALK) price target to $75, down from $87. Despite the negative revision, Wadewitz maintains a Buy rating on the airline’s shares. The decision is in reaction to recent industry presentations and remarks that show a pattern of lower first-quarter performance, with persistent consumer weakness causing issues for a number of airlines, including Alaska Air.
Alaska Air Group, Inc. (NYSE:ALK) announced strong financial results for the fourth quarter of 2024. Earnings per share reached $0.97, far above the prediction of $0.43. The company’s revenues also exceeded estimates, reaching $3.53 billion instead of the expected $3.41 billion.
3. American Airlines Group Inc. (NASDAQ:AAL)
Number of Hedge Fund Holders: 59
American Airlines Group Inc. (NASDAQ:AAL) is a holding company that operates a net carrier, which transports both passengers and cargo. Based in Texas, the airline owns and maintains a fleet of more than 900 aircraft.
American Airlines Group Inc. (NASDAQ:AAL) has revised its Q1 revenue forecasts for 2025, projecting a 4% decrease, which led to BofA Securities reducing its price target for the airline from $20 to $16 while maintaining a Neutral rating. The change follows an increase in earnings per share estimates for the first quarter of 2025, which are now estimated to be $0.70, in line with the company’s updated predictions. Meanwhile, Citi maintains a Buy rating on American Airlines Group Inc. (NASDAQ:AAL) with a $21.50 price target, although admitting demand is weakening due to a variety of issues such as tariff uncertainty and recent aviation events. That said, Citi analyst Stephen Trent expressed optimism in the airline’s medium-term future, noting solid revenue projections from premium travel and co-branded card arrangements.
2. Delta Air Lines, Inc. (NYSE:DAL)
Number of Hedge Fund Holders: 84
Delta Air Lines, Inc. (NYSE:DAL) is a major airline headquartered in Atlanta, Georgia, that operates scheduled flights for both passengers and cargo worldwide. It works through two business segments: the Airline Segment and the Refinery Segment.
On March 11, UBS analyst Thomas Wadewitz cut Delta Air Lines, Inc.’s (NYSE:DAL) price target to $77 from $90, while keeping a Buy rating on the company. The revision comes after Delta announced a lower-than-expected revenue growth outlook for the first quarter of 2025. The airline had expected revenue growth of 7% to 9%, but has now revised its forecast to 3% to 4%. Delta Air Lines, Inc. (NYSE:DAL) noted many variables for this increase, including fuel prices that are currently $0.05 per gallon more than their initial projection for the quarter.
Despite a slow start to the year, Delta Air Lines, Inc. (NYSE:DAL) showed hope for the near future, reporting high booking levels in April and May. In addition, current patterns within premium and overseas tourism seem strong, thereby suggesting a probable upswing for these sectors.
1. United Airlines Holdings, Inc. (NASDAQ:UAL)
Number of Hedge Fund Holders: 86
United Airlines Holdings, Inc. (NASDAQ:UAL) is a well-known airline company whose mainline and regional fleets transport both passengers and freight across the globe.
On March 7, UAL stated that it has installed Starlink on its first regional aircraft and revealed specifics of the procedure to highlight the equipment’s technical operational benefits, such as size and weight, as well as simplicity of installation and maintenance. The airline aims to furnish 40+ regional aircraft per month, beginning in May until the end of 2025.
In the fourth quarter of 2024, United Airlines Holdings, Inc. (NASDAQ:UAL) increased overall revenue per available seat mile by 1.6% year-over-year, owing to a 6.2% increase in capacity. The company also generated record quarterly earnings, with an EPS of $3.26, which came above forecasts, and contributed to a full-year EPS of $10.61.
While we acknowledge the potential of UAL as an investment, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than UAL but trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks to Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
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