The airline sector is crucial to the global economy as it connects destinations worldwide, facilitates travel and trade, and provides excellent mid-air hospitality. In 2024, the industry generated $996 billion in revenue, which is expected to continue growing in 2025.
As the industry grows, acquiring shares in leading airlines could exemplify strategic investing for the upcoming year(s). We’ve created this handy beginner’s guide to help you better understand trading and investing in the airline sector and identify some of the best airline stocks to buy in 2025.
How to Trade or Invest in Airline Stocks – Quick Guide
- Step 1: Research airline companies. Determine which types of airlines you want to invest in and research the companies that fit your outlook. If you’re bullish on airlines but would rather not choose among individual stocks, there are also Airline ETFs.
- Step 2: Open a brokerage account. Once you've located your ideal airline investments, you'll need a brokerage account. Trading lets you speculate on rising or falling prices via CFDs, investing lets you take direct ownership of Airline stocks.
- Step 3: Decide how much capital to put toward airlines. Airlines have lagged behind the market in recent years, but past performance doesn't predict future performance. Still, you never want to put too much capital into a single industry, especially one with a track record like the airlines.
- Step 4: Buy your shares and monitor your investments. Airline stocks, especially mega-cap stocks, are easy to find on significant brokerages like NAGA.com. Only add to your portfolio shares of the airline companies you research and ensure they mesh with your clear goals and risk appetite.
Or, if you want to get a greater understanding of the airline sector before you take a position, continue reading our full guide.
Why Invest in Airline Stocks in 2025?
Investing in airline stocks in 2025 can be attractive for several reasons:
1. Strong travel demand and recovery post-pandemic
The airline industry is benefiting from a robust recovery in travel demand following the pandemic lockdowns. This includes not only leisure travel but also a rebound in business travel and international routes, which are expected to continue driving growth in 2025.
2. Improved Industry Efficiency and Financial Discipline
The pandemic led many airlines to streamline operations, optimize routes, and improve financial discipline. This has resulted in leaner operations and stronger pricing power due to industry consolidation, which can enhance profitability.
3. Analysts’ Positive Outlook and Earnings Growth
Analysts have raised price targets for major U.S. airlines, citing strong demand and a shift toward competing on service rather than price. This "de-commoditization" of air travel is seen as beneficial for customer loyalty and airline profitability.
4. Potential for Capital Gains and Dividends
While many airlines operate on thin profit margins, investors can benefit from capital gains as share prices rise with improving fundamentals. Some airlines also offer dividends, although this varies by company.
5. Exposure to Global Economic Growth
Airline travel spending tends to increase with global GDP growth, giving investors exposure to broader economic expansion.
6. Lower Fuel Costs and Ancillary Revenue Growth
Despite some volatility, fuel costs have been decreasing, which improves profit margins. Additionally, airlines are generating more ancillary revenues (e.g., fees for premium services), supporting higher overall revenues.
Types of airline stock
Airlines are categorized into three groups - major airlines, national airlines and regional airlines. The amount of revenue an airline generates defines how it is ranked.
Major airlines
The biggest companies in the sector make up this airline group. An airline would be considered in this category if its yearly revenue exceeded £1 billion. Among the corporations classified as both blue-chip stocks and significant airlines are Delta Air Lines, United Airlines, and Southwest Airlines.
National airlines
Compared to giant airlines, these businesses typically have a smaller fleet and make between £100 million and £1 billion in revenue annually. These airlines may include foreign destinations in their route network and serve their respective countries' regions.
Regional airlines
These airlines service regions within a country. This segment of the industry is growing quickly and is separated into three groups, large, medium and small regional airlines with under 61 seats.
Fundamentals of investing in airline stocks
Here are some important metrics to consider when investing in airline stocks. However, these are just a few factors investors use to evaluate airline stocks, but don't limit your research to just these three.
Debt-to-equity ratio
A company's total debt (including long-term and short-term, plus fixed payments) divided by shareholders' equity is called its risk rate. While a high debt-to-equity ratio doesn't always indicate trouble, businesses with lower ratios are better able to meet their obligations in the event of an interruption.
Price-to-earnings ratio
P/E ratios calculate a stock's price in relation to its earnings. A public firm receives greater value for every dollar of earnings the lower its price-to-earnings ratio. Use a P/E calculator to perform your own calculations.
Revenue per available seat mile (RASM)
This measure is exclusive to the airline sector. A 50-seat aircraft travelling 500 miles would have five thousand available seat miles. "Available seat mile" refers to each mile flown by each seat on the aircraft. Airlines use the Revenue-Averaging System (RASM) to determine how much money they make per seat on their fleet.
Factors influencing airline stock prices
Finding the best airline stocks to invest in requires a different evaluation than most stock research (see some of the best stocks to buy in 2025). Airlines face heavy regulation and unpredictable costs, and their stocks haven't always rewarded investors.
Company health
Overvalued airlines rarely make a good stock investment, so the first features you should look at are figures like enterprise value and debt-to-capitalization rate. Airlines always seem cheap when using the price-to-earnings ratio, or P/E ratio (share price divided by earnings per share), so that's not an ideal metric for finding the best airline stocks to buy.
Free cash flow
In addition to being subject to strict regulations and fuel prices, the aircraft business also has high capital equipment expenditures. Aircraft manufacturing is difficult, and maintaining, servicing, and cleaning them requires expensive equipment. A good place to start your stock analysis is with the free cash flow yield. Airlines experiencing cash flow issues could find it difficult to cover their operational costs.
Management
Ultimately, the reputation of airlines is not the best. There is rarely another industry where the public is as cynical as the aviation industry. Many airlines mishandle their finances and customer relations, which contributes to this in part. Make sure the company has a management team you trust before investing in airline stocks.
10 Of the Best Airline Stocks for 2025
Here are some of the best airline stocks to consider for 2025 according to analysts' coverage and consensus, with detailed insights on each:
1. Delta Air Lines (DAL)
- Market Cap: $33.45 B
- P/E: 9.74
- Dividend Yield: 0.77%
With its headquarters located in Atlanta, Georgia, Delta Air Lines (DAL) is a prominent American airline that belongs to the legacy carrier category. Together with its regional affiliates and subsidiaries, such as Delta Connection, Delta is the oldest airline in the United States and the seventh oldest airline globally. With over 5,400 daily flights, it covers 325 destinations across 52 countries on six continents.
Past performance is not indicative of future results
DAL is currently trading at a low forward P/E ratio around 9, which is below the airline industry average, suggesting it may be undervalued relative to its earnings potential This makes it appealing and one of the best airlines stocks in 2025 and beyond for value investors. Analysts see an upside potential based on price targets averaging $55.67, with some targets as high as $80.
Start trading Delta Airlines stocks today
2. United Airlines Holdings (UAL)
- Market Cap: $17.00 B
- P/E: 5.92
- Dividend Yield: -
With its headquarters is located in Chicago's Willis Tower, United Airlines Holdings Inc. (UAL) is a leading airline holding corporation providing passenger and cargo services worldwide. Operating as United Airlines, Inc., it was formerly known as United Continental Holdings, Inc. United Airlines, with 948 planes and 92,795 personnel, is the third-largest airline globally. It was founded by William Boeing and came about due to the late 1920s and early 1930s airline and manufacturer mergers.
Past performance is not indicative of future results
United Airlines has shown robust performance entering 2025, with over 100% stock price increase over the past year, driven by a resurgence in corporate travel and strong international market demand, especially in transatlantic routes and premium travel segments. This top airline stock has strong buy ratings from analysts, with 21 buy recommendations versus only one sell rating. Financial metrics like a high return on equity (33.57%) and solid revenue growth (5.4%) support confidence in the company’s management and growth prospects.
3. Southwest Airlines (LUV)
- Market Cap: $16.06 B
- P/E: 32.3
- Dividend Yield: 2.68%
A significant US airline that uses a low-cost carrier business model is Southwest Airlines Co. With scheduled service to 121 locations in the US and 10 other countries, it is based in Love Field, Dallas, Texas, which is part of the Dallas-Fort Worth metroplex. More domestic travelers traveled with Southwest than with any other US airline. In terms of passengers carried, it is currently the third-biggest airline in North America.
Past performance is not indicative of future results
At the beginning of 2025, Deutsche Bank upgraded Southwest from Hold to Buy and raised its 12-month price target from $28 to $40, reflecting growing confidence in the airline's strategic initiatives and potential for meaningful growth.
Start trading Southwest Airlines stocks today
4. International Consolidated Airlines (BABWF)
- Market Cap: $10.08 B
- P/E: 4.85
- Dividend Yield: -
Following the merger of British Airways and Iberia, International Consolidated Airlines Group S.A., or IAG, is an international airline holding company that was established in January 2011. IAG, which has its corporate headquarters in London, England, and its registered office in Madrid, Spain, is in charge of both airlines as completely owned subsidiaries. 55% of the new company's shares were awarded to British Airways' stockholders.
Past performance is not indicative of future results
After heavy losses during the pandemic, IAG has experienced a significant recovery. It was one of the best airlines stocks to buy with its share price rising almost 100% during 2024, driven by the rebound in business travel and transatlantic routes. Analysts have been revising earnings estimates upward, reflecting optimism about IAG’s future profitability.
5. American Airlines (AAL)
- Market Cap: $9.08 B
- P/E: 5.60
- Dividend Yield: -
American Airlines In terms of revenue passenger mile and scheduled passenger carried, it is the biggest airline in the world. American operates a vast domestic and international network with about 6,800 flights each day to nearly 350 destinations in 48 countries, in conjunction with its regional partners and affiliates.
Past performance is not indicative of future results
American Airlines stock may appeal to value investors looking for a beaten-down airline stock with improving earnings estimates and strong institutional interest. Yet, potential investors should weigh these positives against industry cost challenges and economic risks.
Start trading American Airlines stocks today
6. Lufthansa (LHA.DE)
- Market Cap: $8.0 B
- P/E: 7.29
- Dividend Yield: 4.06%
When it comes to passengers carried, Deutsche Lufthansa AG is ranked second in Europe, and by revenue, it is the fourth-largest airline worldwide. Founded in 1953, Lufthansa started operating in April of 1955. The Lufthansa Group owns a number of airlines in addition to running flights under its own name, such as Swiss International Air Lines, Austrian Airlines, Brussels Airlines, Discover Airlines, and Eurowings.
Past performance is not indicative of future results
Lufthansa is forecast to grow earnings at about 12.8% per year and revenue at 3.5% per year over the next few years, indicating potential for solid financial improvement. As one of the best European airlines stocks, it offers a dividend yield of about 4.06%, providing income potential alongside capital appreciation.
Start trading Lufthansa stocks today
7. Qantas Airways (QAN.AX)
- Market Cap: $6.59 B
- P/E: -13.0
- Dividend Yield: -
Australia's flag carrier is Qantas Airways Limited. In terms of foreign flights, international destinations, and fleet size, it is the biggest airline in Australia and Oceania. With its November 1920 founding, Qantas is the oldest airline in the English-speaking world and the third oldest airline in the world overall. Qantas is one of the original airline members of the Oneworld alliance.
Past performance is not indicative of future results
While this top Australian airline stock is trading near its intrinsic value and 52-week highs, it still trades at a discount compared to regional and US peers on price-to-earnings basis, suggesting room for upside potential. Most analysts have retained buy ratings with price targets above current prices, citing strong domestic travel trends, disciplined cost management, and reinstated dividends as key drivers.
8. Alaska Airlines (ALK)
- Market Cap: $5.41 B
- P/E: 33.9
- Dividend Yield: -
Major American airline Alaska Airlines is based in SeaTac, Washington, which is part of the Seattle metropolitan area. In terms of scheduled passengers carried, it ranks as the fifth-biggest airline in North America. Alaska provides a route network largely centered on connecting cities along the US West Coast to over 100 destinations, in collaboration with its regional partners Horizon Air and SkyWest Airlines.
Past performance is not indicative of future results
The company is expanding its route network, including launching Seattle as an international gateway with nonstop flights to Tokyo and Seoul, and adding 12 international widebody destinations by 2030. This expansion supports future growth potential. Alaska Air has a well-regarded management team and has unveiled a strategic plan aimed at generating $1 billion in incremental profit over three years.
Start trading Alaska stocks today
9. EasyJet (EZJ.L)
- Market Cap: $4.48 B
- P/E: -
- Dividend Yield: 0.98%
Based at London Luton Airport, EasyJet plc is a low-cost airline group with British multinational status. EasyJet UK, EasyJet Switzerland, and EasyJet Europe are its affiliate airlines, and together they offer 927 routes in over 34 countries for scheduled domestic and international service operations. EasyJet plc is a component of the FTSE 100 Index and is listed on the London Stock Exchange.
Past performance is not indicative of future results
Despite economic headwinds like the UK and European cost-of-living crisis, volatile fuel prices, and geopolitical tensions, EasyJet's affordable pricing appeals to cost-conscious travelers, supporting demand. Among 21 analysts covering EasyJet, the majority recommend it as a buy or strong buy, with no sell ratings. The stock is considered undervalued relative to its fair value, making it one of the best airlines stocks for 2025 and the next 5 years.
Start trading EasyJet stocks today
10. Copa Holdings (CPA)
- Market Cap: $4.19 B
- P/E:11.6
- Dividend Yield: 3.23%
Panama's flag carrier is Copa Holdings. Tocumen International Airport serves as its primary hub, and its headquarters are located in Panama City. Copa is a Star Alliance member and a division of Copa Holdings. Under the names Wingo and Copa Airlines Colombia, the airline is owned by Copa Holdings, which also owns AeroRepública, a Colombian airline.
Past performance is not indicative of future results
Copa is actively expanding and modernizing its fleet, with firm orders for additional Boeing 737 MAX-8 aircraft through 2028. This fleet renewal supports long-term growth and sustainability, reducing costs and enhancing competitiveness. Copa Holdings offers a compelling combination of undervaluation, operational excellence, growth initiatives, and shareholder returns, making it one of the best stocks in the airline sector for both value and growth investors.
Start trading Copa stocks today
There are also airline ETFs
If you'd rather not research individual companies, airline ETFs allow you to own a sizable portion of the industry. Some exchange-traded funds (ETFs) have a broad investment base in the travel industry, which covers restaurants, hotels, and other modes of transportation. The U.S. Global Jets ETF is the only exchange-traded fund that is specifically focused on airlines.
The only option to have pure exposure to a wide range of airlines without incorporating other travel and transportation securities is through the Jets ETF, which possesses assets of just $2 billion. In addition to several regional and low-cost airlines, JETS provides exposure to the main three American airlines.
Past performance is not indicative of future results
There are more ETF possibilities available if you're ready to branch out into the broader transportation industry. The largest is the iShares U.S. Transportation ETF, which includes trucking, delivery, railroad, and ridesharing companies in addition to airlines. The SDPR S&P Transportation ETF (XTN) allocate more than 25% of their holdings to airlines.
Some of the Best ETFs for 2025
How to add airline stocks to your portfolio
There are a few ways to invest in airlines. A traditional way is through buying and selling shares on a local stock exchange. This requires you to pay the full share value upfront, which can be a large sum of money to spend in one transaction.
An alternative method is to trade on margin via CFDs, which means you are only required to place a fraction of the full trade amount, known as a deposit, to gain exposure to the share market.
Our trading platform and mobile stock apps enable users to add airline stocks to your portfolio both ways. However, note that trading and investing are 2 different things, although there are similitudes.
Trading airline stocks
‘Trading’ lets you speculate on the price of a stock or other financial asset rising or falling using derivatives like CFDs. If you want to take a position on Airline stocks or ETFs without owning them directly, then CFDs might be for you.
Bear in mind that these are leveraged products, which means they enable you to get full market exposure for an initial deposit – known as margin. But, while leverage can increase your profits, it can also increase your losses.
Buying airline stocks
‘Investing’ means that you’re taking direct ownership of something with the aim to benefit from prices rising. You’ll be able to invest in the shares of individual companies that are involved in the airline sector, or in ETFs to get broad exposure to airlines.
Leverage isn’t available when you’re buying shares of stock, so you’ll need to commit the full cost of your position upfront. While this could increase your initial outlay, it also caps your maximum risk with the amount of money you paid to open your position.
Conclusion
Investing in airline stocks for 2024 presents an intriguing opportunity amidst the sector's recovery from pandemic-induced challenges. The industry's adaptability, evidenced by the exploration of new revenue streams and loyalty program monetization, signifies a potential shift toward sustained profitability.
By carefully evaluating factors such as route networks, financial health, and strategic initiatives, investors can identify airline stocks poised to weather uncertainties and potentially soar to new heights in 2025.
Free Resources
Before you start investing or trading Airline stocks, you should consider using the educational resources we offer, like NAGA Academy or a demo trading account. NAGA Academy has lots of free trading and investing courses for you to choose from, and they all tackle a different financial concept or process – like the basics of analyses – to help you to become a better trader or make more-informed investment decisions.
Our demo account is a suitable place for you to learn more about leveraged trading, and you’ll be able to get an intimate understanding of how CFDs work – as well as what it’s like to trade with leverage – before risking real capital. For this reason, a demo account with us is a great tool for stock investors who are looking to make a transition to leveraged trading.
Sources:
- Major Airlines of the World - Nations Online Project
- Largest airlines by market cap (companiesmarketcap.com)
- JETS - U.S. Global ETFs (usglobaletfs.com)
- Simply wall
