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The 5 Best Airline Stocks to Buy Now

  • This list of best airline stocks presents an untapped pocket of growth, which could lead to lucrative capital gains for investors.
  • Southwest Airlines (LUV): Successful revenue initiatives and corporate offerings add resilience to the stock’s long-term prospects.
  • American Airlines (AAL): Its robust market share could see it deflect any capacity issues by raising prices. 
  • Delta Air Lines (DAL): Strong buy signals are emerging, namely the firm’s fleet expansion and director share purchases.
  • Hawaiian Holdings (HA): A high-beta play with value in abundance. Additionally, the company’s revenue is surging beyond the norm.
  • Air Canada (ACDVF): Recently upgraded on Wall Street, Air Canada is a penny stock worth noting.
Best Airline Stocks - The 5 Best Airline Stocks to Buy Now

Source: Shutterstock

Airliners are on the up again. Factors such as easing pandemic lockdowns and proliferating summer travel have coalesced to form an exponentially growing air travel market. For investors, that creates an opportunity in some of the best airline stocks to buy.

Earlier this month, the Bureau of Transportation Statistics revealed that U.S. airfares soared by 34.1% in June, adding to an array of strong year-to-date numbers for the industry.

Furthermore, there seems to be intra-industry optimism. United Airlines (NASDAQ:UAL) CEO Scott Kirby recently opined the following:

If you look at fares, while they’re up a lot from pre-pandemic lows, in real terms, our fares in the second quarter are going to be back to about where they were in 2014. So we’re back to kind of a normal pricing environment. We’re just returning to normal.

It’s clear that there’s no dearth of indicators supporting a surge in the airline industry. So, which airline stocks should you invest in? Consider these seven best-in-class assets.

Best Airline Stocks: Southwest Airlines (LUV)

a southwest airline stocks (LUV) jet flying above the clouds

Source: Carlos E. Santa Maria / Shutterstock.com

Southwest Airlines (NYSE:LUV) has been one of the top industrial gainers after Susquehanna upgraded the stock to a positive rating earlier this month. According to the brokerage firm, LUV stock is an outlier due to the company’s successful revenue initiatives and its break into the corporate space.

Investors have the opportunity to snap up LUV stock at a normalized price-sales discount. Additionally, the stock is trading above its 10- and 50-day moving averages, implying that a momentum pattern has formed.

American Airlines (AAL)

American Airlines plane on ramp in Chicago Airport. American Airlines is amongst the airlines cancelling flights

Source: GagliardiPhotography / Shutterstock.com

Capacity concerns have overshadowed American Airlines’ (NASDAQ:AAL) 80% year-over-year revenue surge, reported in its second-quarter earnings release. Although the company’s third-quarter revenue is expected to land between 10% to 12% higher than in 2019, American Airlines anticipates capacity to recede by 8% to 10%. 

I don’t see capacity issues as a long-run implication. In fact, I believe American Airlines’ approximate 18.6% market share and its loyal consumer base provides it with pricing power that few airlines have. As such, the company could likely counteract any capacity issues with higher fare prices.

Best Airline Stocks: Delta Air Lines (DAL)

Delta (DAL) airlines plane mid take-off

Source: Markus Mainka / Shutterstock.com

Delta Air Lines (NYSE:DAL) stock is supported by a variety of buy signals. For instance, company director, David Taylor recently opted to buy an additional 10,000 shares, suggesting that internal management holds confidence in the firm’s near-term financial performance. 

Furthermore, Delta recently ordered 12 A220 aircraft from Airbus (OTCMKTS:EADSY) and 100 737 Max jets from Boeing (NYSE:BA), conveying the firm’s confident outlook.

The stock’s trading at a 2.08x discount to its sales, meaning that DAL stock is on the cheap.

Hawaiian Holdings (HA)

A Hawaiian Airlines plan flying over the water.

Source: Markus Mainka / Shutterstock.com

Hawaiian Holdings (NASDAQ:HA) is an earnings momentum play. The company reported its second-quarter financial results late in July and revealed revenue of $691 million (up 68.2% year over year), beating estimates by $21.03 million.

With a beta coefficient of 1.53, this is considered a high-risk asset. However, HA stock could be an excellent high-beta play for all types of investors during an airline bull market, especially as it’s trading at a 2.44x discount to its sales.

Best Airline Stocks: Air Canada (ACDVF)

image of air canada airplane

Source: Vytautas Kielaitis / Shutterstock

Air Canada (OTCMKTS:ACDVF) is another airliner that recently earned recognition from Wall Street analysts. According to Matthew Lee of Canaccord Genuity, Air Canada’s “28% decline over the prior three months has created an attractive buying opportunity not seen since the heart of the pandemic.”

Furthermore, the company recently established an exciting codeshare initiative with Emirates to drive passenger growth. The agreement includes additional customer travel choices as well as reciprocal lounge access and flyer miles. 

Air Canada exhibits robust top-line growth with a year-over-year revenue surge of 2.6x. In addition, the stock is trading at a 1.4x discount to its sales, suggesting that market participants have yet to price in the stock’s full potential.

On the date of publication, Steve Booyens held indirect long positions in AAL, DAL, and LUV. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Steve co-founded Pearl Gray Equity and Research in 2020 and has been responsible for institutional equity research and PR ever since. Before founding the firm, Steve spent time working in various finance roles in London and South Africa. He holds an MSc in Investment Banking from Queen Mary – University of London and is working towards his Ph.D. in Finance, in which he’s attempting to challenge the renowned Fama-French 5-factor pricing model by incorporating ESG factors. His articles are published on various reputable web pages such as Seeking Alpha, TipRanks, Yahoo Finance, and Benzinga. Steve’s articles on InvestorPlace form an interesting juxtaposition between mainstream opinion and objective theory. Readers can expect coverage on frequently traded stocks, cryptocurrencies, crowdfunding, and ETFs.


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