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Best airline stocks to buy in 2021
This page covers the basics of the airline industry and why you may want to invest in airline stocks. The focus is on the best options available today to help you get started.
What are the top airline stocks to buy?
You can own shares in some of the most successful airline companies by investing in stocks within the airline industry. Our experts have been through the stock market to choose their favourites and you can find them ranked in the table below. Click the links to find up to date price information or read on for a summary of each company in turn.
|#||Stock ticker||Company name|
|2||DAL||Delta Air Lines, Inc.|
|3||AAL||American Airlines Group|
|4||JBLU||JetBlue Airways Corp.|
1. Southwest Airlines [NYSE: LUV]
Southwest Airlines is a major American airline group. A promising company for post-pandemic travel recovery, their stock is attractive to investors as they are the world’s largest low-cost carrier servicing 121 destinations in America and 10 other countries.
There was a downturn in profits in 2020, but Southwest has made a strong revenue recovery in 2021 – a trend that is expected to continue. Supported by strong current financials in terms of its cash to debt ratio, market forces should enable LUV stock to recoup short-term dips.
Furthermore, the lull in air travel has not impacted Southwest’s operations as adversely as its competitors because the company’s majority focus is on regional air travel. As American regional airports are now completely open for air travel without restrictions as severe as those for international travel, Southwest is well-positioned to overcome the pandemic downturn.
2. Delta Air Lines, Inc. [NYSE: DAL]
Delta Air Lines, Inc. is an American carrier that operates both domestically and internationally. The company’s segments include both airline and refinery, making it a viable stock for investors old and new. The company currently enjoys market presence and has commercial hubs across airports in Amsterdam, London, Mexico City, Seoul, and Paris.
Also experiencing the industry-trend of a downturn in profits during the pandemic, Delta has a promising business development strategy in place for post-pandemic recovery.
Though a significant industry-wide concern affecting risk assessment for Delta stock is the highly competitive industry. Delta’s prices are often higher than lower-budget airlines and this places significant pressure on the company’s future performance in a stiff post-pandemic market. Investors must consider this unique risk when considering DAL for their portfolio.
3. American Airlines Group [NASDAQ: AAL]
American Airlines Group is a holding company primarily operating as a network air carrier transporting passengers and cargo through regional America. It has numerous regional hubs in its American segment, several multinational partner gateways, and notable subsidiaries.
Having experienced a decrease in revenue during the pandemic like its contemporaries in the industry, it has made a solid comeback with its post-pandemic financials. Between January and September of 2021, revenues for the group have increased by 54% and net losses have decreased by 84%.
However, it must be noted that the company’s sizable debt currently outweighs its market cap and this is a risk factor a new investor must contend with when considering the addition of AAL to their portfolio.
4. JetBlue Airways Corp. [NASDAQ: JBLU]
JetBlue Airways Corp. is an American travel company providing air transportation services across regional America, Latin America, The Caribbean, and between London and New York. It currently enjoys more than 30 million passengers a year for its destination map of 86 cities.
In their attempt to overcome the downturn in pandemic revenue, JetBlue’s commercial strategy for recovery has been to add ~125 new routes to their destination map (particularly in Latin America), cut costs with an expected fall in the price of fuel, and roll out competitive economy class pricing.
Though a unique risk new investors to the stock must weigh is JetBlue’s heavy reliance on its expansion strategy for Latin America – an easy downfall if the economy slumped in the region.
5. EasyJet PLC [LSE: EZJ]
EasyJet PLC is a UK company that operates a low-cost European airline. It is hugely popular for point-to-point European travel and currently serves approximately 156 airports across 33 countries.
The worst of the pandemic seems to be over with the UK removing all travel bans and EasyJet’s popular short-haul market being clear now for weeks. This is evident in EasyJet delivering a positive operating cash flow of £40m in Q4 despite the pandemic downturn in profits. This renews investor optimism in the stock, reflecting stable company liquidity for the future.
Though with new lockdowns enforced across the continent, new investors to the stock must consider the risk of looming UK travel bans with the ongoing pandemic. While post-pandemic air travel persists, EasyJet can be a great short to medium term investment with adequate risk assessment.
Where to buy the best airline stocks
The best place to find all of these shares is through an online stock broker. We have pulled together the best brokers below so that you can get a quick start simply by following the links in the table.
What is an airline stock?
A stock in the airlines sector that comprises companies operating commercial and/or cargo fleets of air transport. Popular companies that attract investor interest are household names like Delta Airlines, EasyJet, American Airlines, etc.
Are airline stocks a good investment?
If you invest with a view of the long term, yes. Any investment made must be without expectation of quick profit and with the view of long-term hold for return in investment. The main concern in the short term is that the industry heavily relies on the price and supply of fuel and fuel prices have incurred dramatic increases in the last year – meaning unpredicted future costs for airline companies.
The International Trade Association (IATA) has indicated that due to the ongoing pandemic, it is expected that long-haul air travel will be slower in recovering, and international air travel may not recover to pre-pandemic levels till 2023-2024. However, the good news is that post-pandemic recovery in the short term looks promising for domestic and short-haul air travel.
As with any stock investment, investors must do their own due diligence into the stock and broker that is the right fit for them. You will find our list of the best brokers for airline stock listed below.
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Fact-checking & references
Our editors fact-check all content to ensure compliance with our strict editorial policy. The information in this article is supported by the following reliable sources.
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