Airline stocks took a nosedive during the COVID-19 pandemic, but that hasn’t stopped traders from circling back for potential gains. With the industry rebounding and demand for air travel surging, investors are eyeing opportunities. But is buying airline stocks a smart move in 2025? Let’s explore the best airline stocks, industry trends, and ETF options.
-1741361676.png)
Historically, airline stocks have been volatile, often underperforming due to economic downturns, fuel price fluctuations, and intense competition. Warren Buffett once quipped that investors would have been better off if someone had “shot Orville down” at Kitty Hawk. Despite this, industry consolidation has strengthened major carriers, making them more resilient.
During the pandemic, airlines were among the hardest-hit sectors. Air Canada (TSX: AC) saw its stock plummet nearly 75%, while U.S. carriers like American Airlines (NASDAQ: AAL) and Delta Airlines (NYSE: DAL) also faced severe declines. Since then, the industry has rebounded, fueled by strong consumer demand, premium travel services, and improved pricing strategies.
🇺🇸 The 5 best airline stocks to buy this year
The airline sector is now divided into full-service carriers, budget airlines, and regional operators. Here's a list of some of the top airline stocks for investors:
| Airline company (Ticker) | Fast facts | Overview |
|---|---|---|
| Delta Air Lines (NYSE: DAL) |
Market cap: $38.7B
Dividend: 0.9% |
A leader in innovation, Delta has prioritized premium services and labor agreements, keeping its operations stable. |
| United Airlines (NASDAQ: UAL) |
Market cap: $32.6B
Dividend: N/A |
With strong business and international routes, United benefits from its expansive network, particularly in tech and energy hubs. |
| Southwest Airlines (NYSE: LUV) |
Market cap: $20.4B
Dividend: N/A |
The original budget carrier, Southwest maintains financial stability despite recent IT challenges and operational disruptions. |
| Alaska Air Group (NYSE: ALK) |
Market cap: $8.2B
Dividend: N/A |
Following its Hawaiian Airlines acquisition, Alaska has expanded its reach and continues to outperform its larger competitors. |
| Frontier Group Holdings (NASDAQ: ULCC) |
Market cap: $1.8B
Dividend: N/A |
A no-frills, ultra-low-cost carrier, Frontier thrives by catering to price-conscious travellers. |
Please note that dividend policies are subject to change based on each airline's financial health and strategic decisions. While Delta reinstated its dividend, United, Southwest and Alaska have not resumed dividend payments. For the most current information, it's advisable to consult the investor relations sections of these companies' official websites or recent financial statements.
🇨🇦 4 top Canadian airline stocks
Canada’s airline sector has also seen significant movement, with some standout stocks listed on the TSX. Here are a few of the top Canadian airline stocks:
| Canadian airline company | Fast facts | Overview |
|---|---|---|
| Air Canada (TSX: AC) |
Market cap: $8.1B
Dividend: N/A |
The dominant player in Canadian aviation, Air Canada has rebounded strongly post-pandemic and continues to lead in both domestic and international markets. |
| Cargojet (TSX: CJT) |
Market cap: $2.5B
Dividend: 0.35% |
A major air cargo provider in Canada, Cargojet has benefited from the e-commerce boom and strong logistics demand. |
| Transat A.T. (TSX: TRZ) |
Market cap: $180M
Dividend: N/A |
Specializing in leisure travel, Transat offers flights and vacation packages, making it a unique play in the airline industry. |
| Exchange Income Corporation (TSX: EIF) |
Market cap: $2.7B
Dividend: 5.8% |
A diversified company with holdings in regional aviation services, making it an attractive option for those looking for exposure beyond traditional airline stocks. |
Airline ETFs for diversification
If you're hesitant to pick individual stocks, opt for airline-focused ETFs:
| Airline ETF | Overview |
|---|---|
| U.S. Global Jets ETF (NYSE: JETS) | Tracks the global airline industry, including major carriers and manufacturers. |
| iShares Transportation Average ETF (CBOE: IYT) | Provides exposure to airlines along with other transportation stocks. |
| SPDR S&P Transportation ETF (NYSE: XTN) | Invests in transportation companies, with airlines making up a significant portion. |
If airline stocks are so volatile, why would anyone buy into them? For starters, day traders are attracted to volatility like sharks are drawn to blood in the water. The daily gyrations of volatile stocks create ample opportunities for day traders to profit from a short-term surge in share prices. Volatility cuts both ways, though, and speculative investors can just as easily get burned when stock prices quickly fall.
American Airlines is easily the most actively traded airline stock in the U.S. with more than 146 million shares traded per day. In the seven trading days from May 29 – June 8, 2020, day traders had a hand in pushing American Airlines stock from $10.50 to $20.31 – an incredible 93% gain in a little more than a week. Three days later the stock had fallen by 30% – a testament to the volatile nature of individual airline stocks today.
More recently, in late 2024, American Airlines' stock experienced notable movements. On December 5, 2024, the stock opened at $15.96 and closed at $17.38, marking an approximate 8.9% increase in a single day. This surge was accompanied by a trading volume exceeding 110 million shares, significantly higher than the average daily volume, indicating increased market activity.
How to invest in airline stock
The best way to invest in airlines is to own the stocks directly or to buy a single ETF that owns the stocks directly. DIY investors know that trading stocks can be expensive and that’s why we recommend using one of the best online brokerages in Canada.
One of our top choices is a Wealthsimple account — an easy-to-use app that allows clients to buy and sell stocks and ETFs for free.
Invest with WealthsimpleWe also like Questrade for the self-directed investing crowd. For over 20 years, Questrade has been the king of low-cost investing in Canada, offering free ETF purchases and now stock trading is also free.
Invest with QuestradeSimply sign-up or log in to your account, and use the available stock screening tools to find the airline stocks or ETFs that you want to invest in. Later in this article, I’ll share the top airline stocks, as well as some potential diamonds in the rough (sky?).
If you’ve never done DIY investing before, don’t sweat it! Read our comprehensive guide on how to buy stocks and you’ll be a pro before you know it.
As the nation’s top airline, Air Canada has a bit of a “too big to fail” aura, as it’s in the federal government’s best interests to keep the company flying high. That gives Air Canada and its shareholders a backstop not enjoyed by other airlines or even other industries. In late 2024, Air Canada experienced a significant resurgence, with its stock rallying over 54.2% in the fourth quarter alone, outperforming the TSX Composite Index's 6% rise during the same period.
Related: How to invest in Air Canada stock
Cargojet reported impressive financial results for 2024, achieving total revenues of $1.0 billion, a 14% increase from the previous year. In the fourth quarter alone, revenues reached $293.2 million, up from $221.9 million in the same period of 2023. The company's net earnings for the year were $108.4 million, marking a substantial rise from $37.3 million in 2023.
Air Canada's recent stock surge reflects a strong recovery in passenger travel demand, positioning it well for future growth. Conversely, Cargojet's consistent revenue growth and profitability highlight its resilience and operational efficiency in the air cargo sector. Investors should align their choices with their risk tolerance and sector preference: Air Canada offers exposure to passenger aviation's recovery, while Cargojet provides stability within the logistics and cargo industry.
As of February 2025, Delta Air Lines (NYSE: DAL) and United Airlines (NASDAQ: UAL) are considered strong investment options among major U.S. carriers. Delta projects 2025 to be its most profitable year ever, anticipating a pre-tax income exceeding $6 billion and earnings per share over $7.35. Similarly, United Airlines has demonstrated robust financial performance, with a net income of $1.2 billion in the first half of 2024, positioning it well for continued growth.
In contrast, Southwest Airlines (NYSE: LUV) has faced challenges, including a recent downgrade due to high valuation concerns and operational issues leading to layoffs. American Airlines (NASDAQ: AAL) has also underperformed its peers, reporting a net income of $405 million in the first half of 2024, lagging behind Delta and United.
Are we still excited by Allegiant Travel?
Allegiant Travel Company (NASDAQ: ALGT) went through some serious fluctuations in its stock performance in recent years. As of February 2025, the stock is trading at approximately $83.26, with a 52-week range between $36.08 and $106.87. That's quite the swing.
And it's why analyst opinions on Allegiant are mixed. Goldman Sachs analyst Catherine O'Brien assigned a "neutral" rating to the stock, highlighting a cautious outlook. Conversely, Zacks Research recently raised its Q2 2025 earnings estimates for Allegiant, suggesting potential optimism about the company's future performance.
To stay on top, Allegiant is looking to make strategic moves, such as the potential sale of its Sunseeker Resort, which could allow the company to refocus on its core airline operations. Its Relative Strength (RS) Rating improved from 70 to 78, indicating a strengthening share price performance over the past 52 weeks.
Robb Engen is a leading expert in the personal finance realm of Canada and is also the co-founder of Boomer & Echo, an award-winning personal finance blog.
Tyler Wade has worked in personal finance for over 5 years writing for brands like Ratehub, Forbes, KOHO, and now Money.ca.
Best investing content
How to
Platform reviews
Latest Articles
Disclaimer
The content provided on Money.ca is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter. Advertisers are not responsible for the content of this site, including any editorials or reviews that may appear on this site. For complete and current information on any advertiser product, please visit their website.
†Terms and Conditions apply.