3 Airline Stocks to Buy Now: May 2024


  • As the summer travel season heats up, these three stocks could be big winners.
  • Delta Air Lines (DAL): Route expansion, healthy financials and strong operations keep Delta on top.
  • SkyWest (SKYW): Stunning performance turnarounds year-over-year have skyrocketed SkyWest.
  • Air France-KLM (AFLYY): A bid to avoid slipping European tourism, Air France has opened even more routes to the New World.
Airline Stocks to Buy - 3 Airline Stocks to Buy Now: May 2024

Source: Jag_cz / Shutterstock.com

With the recent slap in the face from the U.S. Department of Transportation requiring airlines to disclose fee structure, investors might be squeamish about the airline industry as a whole. However, it’s important to recognize that, no matter institutional attitudes towards a shift in legal requirements, airlines are still the lifeblood of American infrastructure. Now with summer fast approaching in the northern hemisphere, U.S.-based airlines could see a bump in Q2 and Q3 revenue, leading to potentially higher valuations. This begs the question, what are the best airline stocks to buy this May?

My picks for this month rely on evaluating two factors: revenue trajectory and route expansion. After all, airlines are now back in full swing post-pandemic and have no excuse for not growing and capturing more customers for flights. As such, here are three airline stocks to buy and hold throughout the coming summer travel season.

Delta Air Lines (DAL)

The Minneapolis-Saint Paul International Airport (MSP) includes two terminals, Lindbergh and Humphrey. It is a hub for Delta.
Source: EQRoy / Shutterstock.com

One of the most dominant airline companies, Delta Air Lines (NYSE:DAL), continues to stay on top quarter after quarter. The company has achieved this through careful dedication to both its domestic and international routes, ensuring that nearly every destination can be reached with the help of Delta in some way or another.

Furthermore, its first-quarter financials showed a healthy operational revenue increase of 6% year-over-year, outpacing inflation for the same quarter alongside a 4.5% operating margin. This allows Delta to continuously remain price competitive while ensuring attractive pilot compensation.

There could be a potential wrinkle in the works for the company, as its flight attendants are seeking unionization for better pay and hours. Should this succeed, the company’s share price could see a brief discount, opening a solid entry opportunity for investors. While it might seem like a no-brainer to buy leading U.S. airline stocks, timing matters for maximizing long-term returns.

SkyWest (SKYW)

A close-up shot of a SkyWest (SKYW) plane.
Source: Heather Dunbar / Shutterstock.com

Though lesser known to most retail investors and frequent flyers, SkyWest (NASDAQ:SKYW) might just be one of the best airline stocks to buy for the next decade of air travel. I’ve discussed the airline’s business model as a regional sub-carrier before, and since my first recommendation, the stock is up 5.53% in just one month. 

This might lead some to view the company as overvalued or overweight, but the financials still back its valuation. Its current price-to-earnings ratio sits at 27.17x, which is next to the overall recommended average of 25. This is exceptionally competitive for the airline industry when considering that 64% of aviation firms are operating at a loss.

Its focus on operational profitability is further underscored by its recent Q1 earnings report for 2024, which saw a net income of $60 million, resulting in $1.45 per diluted share. This is exceptional compared to SKYW’s net loss of $22 million, or $0.45 loss per share, for Q1 2023.

Air France-KLM (AFLYY)

a jet takes off on a clear runway.
Source: m.photo / Shutterstock.com

Through its close partnership with Delta Air Lines, Air France-KLM (OTCMKTS: AFLYY) has expanded to become the fourth-largest European carrier. However, for many European airlines, the current economic situation of the U.K. and Germany’s stagnation has put a damper on continental travel. Moreover, the average European no longer turns to big names when traveling, rather preferring to save money with airlines like WizzAir (OTCMKTS:WZZZY) and RyanAir (OTCMKTS:RYAAY)

However, Air France-KLM intends to circumvent these headwinds by expanding its intercontinental reach and opening new routes to eager tourists. One particular group of routes worth keeping an eye on is its new direct flight options out of Paris-Charles de Gaulle airport. 

These include flights to Salvador, Brazil, Malé, Maldives and extended winter service to Denver, U.S.A., marking a focus on prime tourist destinations like beaches and mountains. As such, Air France-KLM may be able to avoid the slipping demand for aviation travel within the European Union.

On the date of publication, Viktor Zarev did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Viktor Zarev is a scientist, researcher, and writer specializing in explaining the complex world of technology stocks through dedication to accuracy and understanding.

Article printed from InvestorPlace Media, https://investorplace.com/2024/05/3-airline-stocks-to-buy-now-may-2024/.

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