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Best Airline Stocks to Buy in 2021

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 has gradually regained hope that the pandemic is over sooner rather than later due to worldwide vaccination programs. This article introduces you to the airline industry, highlighting the best airline shares with positive prospects this year and beyond.

Where Can I Buy Airline Shares?

We have shortlisted the best brokers in this article who you can sign up with to gain access to airline shares. These online brokers are well-regulated while providing plenty of functional analysis tools and information, so you can make data-driven decisions and reduce your risks.

1
American Airlines (AAL)
User Score
10
Second biggest public airline company by market cap in the US
Some investors see as an undervalued opportunity after the Covid crisis
Steady number of assets as per balance sheet
Description:
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2
Ryanair (RYAAY)
User Score
9.3
The Irish giant has become the market leader in the low-cost travelling industry
Unbeatable presence in Europe with +200 destinations in the world (Feb. 2020)
Room for growth in the stock exchanges sector
Description:
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3
IAG (IAG)
User Score
8.7
It operates multiple brands like British Airways, Iberia, Vueling & Aer Lingus
After a COVID massive sell-off, it's starting to get featured as a volatile yet interesting opportunity
Founded on January 2011 and headquartered in London
Description:
Payment Methods
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4
United Airlines Holdings (UAL)
User Score
8.5
After the 2020 airline crisis, investors consider that UAL might see some good entry as the sector re-activates
One of the biggest airlines companies by revenue ($41.9M as of Jan. 2020, according to Forbes)
Worldwide pressence with thousands of routes in +60 countries
Description:
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5
Southwest Airlines (LUV)
User Score
7.9
Founded in March 1967 and headquartered in Dallas, TX.
One of the best balance sheet in the airline industry
$35B market cap as of February 2020
Description:
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Overview of the Airline Companies

The airline industry suffered from the 2020 COVID-19 pandemic as both local and international air travel was restricted. As a result, all names in the industry fell to multi-year lows in which some investors have seen potential while others have given 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 a worthwhile investment. As it turned out, Buffet’s intention was to diversify its investments: the company focused on Japan’s trading houses while leaving the airline industry. However, the airlines bounced back several months later. 

What Are the Trading Hours for Airline Shares? 

Most of the companies listed in this article are traded on the North American market. Therefore, the regular hours when the market is open are from 9:30 A.M. to 4:00 P.M. (ET). 

How to Trade and Invest in Airline Shares?

1

Open a Trading Account

If you want to trade airline shares, the first step is to register with a brokerage firm. Numerous online brokers offer access to the financial market. Register for an account using your personal information and a form of identification.

2

Choose Stocks

Pick your favourite airline shares from our list or your broker’s offering. Make sure you thoroughly analyse each company before making an investment to become aware of the risks associated with each stock.

3

Place Your Trade

Start trading your selected airline companies after you deposit your capital in the new trading account. Choose the stock from your broker’s online platform, add the money you’d like to invest in it, and place the trade.

Top 10 Airline Shares to Buy

Below, you can find the best airline shares to buy this year based on both financial strength and how the companies coped with the pandemic. Additionally, we’ve selected five of the top airline stocks for a more detailed view of their business activity and potential. 

  1. Southwest Airlines 
  2. American Airlines 
  3. Delta Airlines 
  4. United Airlines 
  5. Spirit Airlines 
  6. Alaska Air 
  7. JetBlue Airways 
  8. Air Canada 
  9. Lufthansa
  10. Ryanair

1. Southwest Airlines

Headquartered in Dallas, Texas, Southwest Airlines runs a huge business in the air transportation industry in the local and international markets. With a market capitalisation of nearly $30 billion, the company suffered losses during the pandemic but was still named the “top airline pick” by Morgan Stanley, recognising its massive potential. 

The company was up 40.24% in the last five years and over 100% since the 2020 pandemic low in March.

2. American Airlines

American Airlines comes with nearly one century of experience in this competitive industry. As global air traffic returns to pre-pandemic levels, American Airlines might represent a good investment opportunity. 

American Airlines was the subject of a short squeeze in January-February 2021, so institutional investors kept buying American Airlines in 2021 despite Buffett’s sell-off. 

3. Delta Air Lines 

Based in Atlanta, Georgia, Delta Air Lines excels in air transportation and cargo within the United States and internationally. Delta’s CEO predicted a surge in U.S. travel this summer, along with closing 2020 with more than $16 billion in cash. During the months following the pandemic, the company went into cost-cutting mode, implementing numerous strict measures, such as early retirement packages, and even planning a $6.5 billion loan backed by the SkyMiles program in September 2021. 

The company’s shares doubled in price since the 2020 COVID-19 dive and are down only by 2% in the last five years overall, including the pandemic lows. 

4. United Airlines

United is more than just an airline – it also sells fuel and handles maintenance services for other companies. It operates a huge fleet of more than 824 aircraft as of February 2021. In addition, it is an active air transportation service provider in North America, the Middle East, Latin America, and Asia-Pacific. 

The company lags the recovery seen in other airlines, so some investors believe it is an undervalued stock with the potential to increase significantly, especially after the share price hit a low of $20 during the pandemic. 

5. Spirit Airlines 

A low-cost airline, Spirit operates hundreds of flights to over 70 destinations in the United States, Latin America, and the Caribbean. It experienced high growth in the pre-pandemic years, becoming the second airline in the country in 2017 in terms of performance. Due to the pandemic, the company received $334 million aimed at funding its employees in 2020.

The company has been in an uptrend since May 2020 and increased by 22% in its year-to-date valuations.

Expert Tip on Investing in Airline Shares

Many investors consider buying airline shares as the industry recovers after the pandemic. However, although leisure travels are expected to return, many analysts retain their reluctance regarding the future of business travel as remote work and video-conferencing seem to turn into long-term trends. As a result, consider your risks before investing in the airline shares and opt for a diversified portfolio.
- Mircea Vasiu

Why Invest in Airline Shares?

The airline industry went through major challenges in 2020. The decline in share prices was so dramatic that many investors were concerned enough not to buy the dip. However, airline stocks rose from their lows and, in many cases, doubled or even tripled in value as business travel and personal travel recovers to pre-pandemic levels.

Frequently Asked Questions

  1. United Airlines operates internationally, and its business covers many other areas than just air transportation services. As a result, it may be a profitable addition to a diversified portfolio.

  2. 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.

  3. Southwest Airlines dramatically improved its cash position. For instance, in December 2020, it had $11 billion in cash and cash equivalents.

  4. Investors buy airline shares to diversify their portfolios. At the same time, they also believe that the travel industry will fully recover to its levels before the pandemic.

  5. Air Canada might be a suitable choice for beginners because its business model goes beyond air transportation and is diversified enough to survive future crises.

  6. The airline industry changed the way people travel and how business is conducted around the world. By investing in airline shares, you support a fast-moving industry with a great growth perspective once the pandemic is over.

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