The airline industry took a major hit in 2020 as the pandemic-related travel restrictions affected all companies around the world. Yet, as time passed, the world regained hope that the pandemic will be over sooner rather than later as vaccination programs are undergoing. This article introduces the reader to the airline and the aviation industry, highlighting the best airline shares with positive prospects in 2021 and beyond.
Overview of the Airline Companies
The airline industry suffered from the 2020 COVID-19 pandemic as both local and international travel was restricted. All names in the industry fell to multi-year lows, but some investors have seen potential while others gave up. During the March-April 2020 meltdown, Warren Buffet’s Berkshire Hathaway, the most expensive publicly-traded stock, sold its stake in the U.S. airline industry – a move that left people wondering if the airline industry is still worth it. As it turned out, Buffet’s intention was to diversify its investments as the company focused on Japan’s trading houses, while leaving the airline industry. However, the airlines bounced back, most of them up over 100% since the lows in 2020.
What Are the Trading Hours for Airline Shares?
Most of the companies listed in this article are listed on the North American market. Therefore, the regular hours when the cash market is open is a suitable time to trade the common shares of companies in the airline industry.
Where Can I Buy Airline Shares?
We've shortlisted the best airline stocks to buy in 2021 and you can start trading them in our recommended brokers by clicking on the buttons of the following table.
Top 10 Airline Shares to Buy
The airline industry had a rough 2020. The decline in the share price was so dramatic that many investors got scared and did not buy the dip. However, the airline shares rose from the lows and, in many cases, doubled or even tripled in value over the quarters.
Below you can find the best airline shares to buy in 2021 based on both financial strength and how the companies coped with the COVID=19 pandemic.
- Southwest Airlines
- American Airlines
- Delta Airlines
- United Airlines
- Spirit Airlines
- Alaska Air
- JetBlue Airways
- Air Canada
From Dallas, Texas, United States, Southwest Airlines runs a huge business in the air transportation services in the country and nearby international markets.
- Market capitalizations - $29.54 billion
- Airline companies were in trouble during the COVID-19 pandemic, but the aviation industry still has strong growth perspectives.
- Listed on the NYSE – New York Stock Exchange
- Up 40.24% in the last five years and over 100% since the 2020 pandemic low in March
- Morgan Stanley recently named the company a “top airline pick.”
As the name suggests, this is another American company active in air transportation services for passengers since the 1930s.
- Market capitalizations - $10.68 billion
- Redditt/WallStreetBets engaged in propping up the share price
- Listed on Nasdaq.
- Up 9% YTD but down 40% in the last year due to the COVID-19 pandemic
- Warned 13k employees of possible furloughs in the first half of 2021.
Delta Air Lines
From Atlanta, Georgia, United States, Delta Air Lines excels in air transportation and cargo within the United States and internationally.
- Market capitalizations - $26.61 billion
- The company’s shares doubled in price since the 2020 COVID-19 dive
- Listed on the New York Stock Exchange and also part of numerous ETFs that track the aviation industry
- Down only 2% in the last five years with strong buying around the 2020 lows
- Delta CEO predicts a surge in U.S. travel this summer
United is more than just an airline – it also sells fuels and handles maintenance services for other companies. It operates a huge fleet, close to 800 aircraft as of February 2020, and is an active air transportation services provider in North America, but also in the Middle East, Latin America, or Asia-Pacific.
- Market capitalizations - $13.14 billion
- It lags the recovery seen in other airlines, so some investors believe it has the potential to rise more
- Listed on Nasdaq and frequently offered by many brokers as a CFD
- Down 10% in the last five years and almost reached $20 during the pandemic
- The company is in a significant cost-cutting process, and just prepared its employees for more job reductions.
A low-cost airline, Spirit operates hundreds of flights to over seventy destinations in the United States, Latin America, and the Caribbean.
- Market capitalizations - $2.92 billion
- In an uptrend since May 2020
- Listed on the New York Stock Exchange
- Up 22% in their Year-To-Date valuations
Headquartered in Seattle, Washington, United States, Alaska Air is involved in both passenger and cargo air transportation. It flies to over a hundred destinations daily, mostly in the United States, Canada, Mexico, or Costa Rica.
- Market capitalizations - $6.73 billion
- It doubled in price since the 2020 stock market meltdown
- Listed on the New York Stock Exchange
- Down 16.08% in the last five years, mostly due to the COVID-19 pandemic
- Beats Q4 202 EPS by $0.38
An air transportation services only company, JetBlue has a strategic alliance with American Airlines to connect travelers in the Northeast part of the United States.
- Market capitalizations - $4.97 billion
- Doubled in price since the 2020 lows
- Listed on Nasdaq and part of most ETFs that track the airline and the aviation industry
- Down 19.82% in the last five years
- Plans to expand to the Trans-Atlantic market
- Recent cash burn improvement
Founded in 1937 in Saint-Laurent, Canada, Air Canada is more than just an airline – it also offers cruise packages, cargo services, as well as travel packages all over the world.
- Market capitalizations - $5.74 billion
- Still down for the year so far, and many investors believe it is just lagging behind the industry
- Traded over-the-counter – OTCQX
- Up over 200% in the last five years, meaning the COVID-19 selloff did not break the long-term trend
- Recently announced that it will let go, 1,700 employees,
From Koln, Germany, Lufthansa is one of the world’s leaders in the aviation industry. However, the pandemic hit the company really hard, so the state had orchestrated a bailout and became a major shareholder.
- Market capitalizations - $7.99 billion
- In an uptrend since the 2020 lows
- Listed on the MDAX index in the German Stock Exchange’s Prime Standard
- Down over 12% in the last five years
Based in Ireland, Ryanair is known as one of the major low-cost airlines in Europe. Hit by the pandemic, the company provides passenger airline services across Europe and it has a mixed Boeing and Airbus fleet.
- Market capitalizations - $21.19 billion
- Up 11% in their Year-To-Date stock price
- Listed on Nasdaq
- Up 37.56% in the last five years
- Recently reported a deal for Boeing’s Max jets
Expert Tip On Investing in Airline Shares
The ideal trading setup is to look for continuation patterns (e.g., pennants, bullish flags, etc.) that form on the airline shares charts before major earning releases. On a breakout after the release and a close above resistance, the market typically continues in the same direction.
Why Invest in Airline Shares?
The airline shares decline in 2020 is seen by many as exaggerated. While most of the stocks had already bounced, there is still a lot of room before we recover to pre-pandemic levels.
Frequently Asked Questions
United Airlines – it operates internationally and its business expands into other areas than just air transportation services.
If you’re looking to buy the dip and expect a surge in air travel once the pandemic is over, then the airline industry might be an attractive option.
That would be Southwest Airlines, as the company dramatically improved its cash position and in December 2020 had $11 billion in cash and cash equivalents.
Investors that want to diversify their portfolios and believe that the travel industry will fully recover to its levels before the pandemic.
Air Canada – its business model goes beyond air transportation and is well-diversified to survive future crises.
The airline industry changed the way people travel and how business is made in the world. By investing in the airline industry, one invests in a fast-moving segment with great growth perspectives once the pandemic is over.