12 Best Aviation Stocks to Buy According to Hedge Funds

5. Southwest Airlines Co. (NYSE:LUV)

Number of Hedge Fund Investors: 36

One of the best airline stocks, Southwest Airlines Co. (NYSE:LUV) is the largest domestic airline in the United States in terms of passenger volume. It has an all-Boeing 737 fleet with about 800 aircraft. The airline company primarily focuses on short-haul, recreational flights that are operated in a single, open-seating cabin arrangement in a point-to-point network. However, it does provide some longer routes and a few benefits for business travelers. In 2025, the business plans to improve its ticketing system to provide allocated seats and make cabin modifications to provide select seats with additional legroom.

Approximately 85% of overall revenue comes from passengers, whilst just 5% comes from cargo and freight. Travel packages and other services account for the remaining 10%.

Operating revenues during the third quarter of 2024 hit a record $6.9 billion, up 5.3% from the previous year, while passenger revenue increased by  5.7% year over year to $6.3 billion. Successful tactical measures fueled this increase and yielded improvements from industry capacity moderation. Overall, Southwest Airlines Co. (NYSE:LUV)’s revenue grew by 5.29% YoY in Q3 of 2024.

The firm’s price estimate for Southwest Airlines Co. (NYSE:LUV) was increased by Bernstein from $30 to $33. The company claims that Q4 guidance and early indications of the successful implementation of new strategies led it to raise its price target, but it is still on the sidelines because of fears about an aggressive buyback strategy and the ongoing risk that significant positive change would not materialize shortly.

Paul Singer’s Elliott Management was the largest stakeholder in the company from among the funds in Insider Monkey’s database. It owns 61.15 million shares worth $1.81 billion as of Q3.