Best Airline Stocks Right Now

Spirit Airlines Inc serves the United States, Latin America, and Caribbean as an airline operator. It primarily offers customers unbundled base fares to strip out any unneeded travel amenities. If needed, a customer can elect for additional options at an extra charge. Flight crews are entirely interchangeable across all aircraft, and maintenance and other support services are simplified due to not having an overly complex fleet. The company has one operating segment, air transportation, owing to its system wide route structure. It may decide to expand its network if a market is underserved or overpriced. The majority of revenue is derived from the United States. United Airlines Holdingsserved more than 162 million customers through 1.7 million flights in 2019. It operates 791 mainline aircraft while its United Express carriers operate 581 regional aircrafts. In fiscal 2019, the company reported $3 billion net income or $11.58 diluted earnings per share, an increase from $2.1 billion or $7.67 diluted earnings per share in 2018. The passenger revenue also increased by $1.9 billion from 2018 after a 3.5% growth in available seat miles (ASMs). UAL repurchased 19.2 million shares for $1.6 billion and recorded U.S. Department of Transport on-time arrival rates of 77.9%. Alaska Air Group operates 2 airlines — Horizon and Alaska. Horizon and Alaska have individual business plans, economic risks and competitive factors. Together with its regional airline partners, Alaska Air flies to 115 destinations with more than 1,300 daily departures through a vast network across the United States, Canada, Mexico and Costa Rica. In 2019, the airline carried an all-time record of 47 million guests. It earned $769 million consolidated income compared to $437 million in the previous year. The company also marked its 16th consecutive year of profitability on an adjusted basis.Alaska Airemployed 24,134 personnel at the end of fiscal 2019. Some of its biggest shareholders include The Vanguard Group Inc., T. Rowe Price Associates Inc., BlackRock Institutional Trust Company and PRIMECAP Management Company. From the U.S. Global ETFs website, “The U.S. Global Jets ETF (JETS) provides investors access to the global airline industry, including airline operators and manufacturers from all over the world.” Sun County Airlines is an ultra-low-cost carrier flying out of Minneapolis-St. Paul International Airport and headquartered on airport property. Delta Air Lines, Inc. provides scheduled air transportation for passengers and cargo in the United States and internationally, with hubs in Atlanta, Minneapolis-St. Paul, Detroit and Salt Lake City, as well as coastal hub positions in Boston, Los Angeles, New York-LaGuardia, New York-JFK and Seattle. There are also international network centered on hubs and market presence in Amsterdam, Mexico City, London-Heathrow, Paris-Charles de Gaulle and Seoul-Incheon. American Airlines Group Inc. and its subsidiaries operate as a network air carrier, with hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix and Washington, D.C. Also, the carrier works through partner gateways in London, Doha, Madrid, Seattle/Tacoma, Sydney and Tokyo. Southwest Airlines Co. operates as a passenger airline company that provide scheduled air transportation services in the United States and near-international markets. Airline stocks are cyclical and previous downturns have resulted in multiple airline failures and bankruptcies. It’s the question everyone’s been asking: Is it safe toinvestin airline stocks now? Which ones are the best-run companies? Benzinga takes a look at some of the best airline stocks so you know where in this industry you should put your money. In short, U.S. airline stocks have been lousy investments after the industry was deregulated in the late 1970s. The deregulation allowed companies to fiercely compete for business. The federal rule changes resulted in a boom and bust pattern — major profits when times were good and liquidations or bankruptcies when the economy went south. Companies like Trans World Airlines (TWA), Braniff International and Eastern Air Lines vanished during this era and investors took billions in losses. The early 2000s was a period of consolidation and restructuring. The number of airlines reduced and the remaining competed and secured the balance sheets of surviving companies. American Airlines Group merged with US Airways. Delta bought Northwest, and Southwest Airlines bought AirTran. Today the airline industry helps propel around $2 trillion in economic activity. Millions of jobs in the U.S. airline sector now fall into 3 categories: You can buy airline stock through any online broker with access to the major stock exchanges. Powerful stock screeners, analysis and research tools are available for use by anyone who registers. You may apply custom filters to identify stocks that fit your investing goals. Most online brokerages will also offer commission-free trades. Here are Benzinga’s favorites to consider if you trade airline stocks. You’ll want to ask yourself about unit revenue, stock liquidity and total debt ratio before you choose an airline stock. Here’s what you need to know: Revenues from ticket sales typically rise and fall with air traffic. A higher PRASM is better because it means an airline squeezes more revenue from each unit of capacity. Revenue per available seat mile (RASM) is an important evaluation metric and factors all sources of revenue. You should consider this for low-cost carriers that often rely on ancillary (non-ticket) revenue to drive sales. A firm with a huge debt ratio will probably incur higher interest payments. This will also reduce profits. A company may then experience difficulty raising capital since investors could see a higher risk of bankruptcy. A huge debt balance could be at risk of credit defaults if the market plummets. Moreover, you must research the safety records of these airlines. Keep in mind, the number of major air accidents has dropped over time. At the same time, the safety record of an airline does not always include accidents and death tolls. Airlines that cannot afford to train their pilots are more likely to suffer from safety scares, turbulent flights and poor landings. At the same time, you must look at the customer service record of each airline. Passengers the world over will pull away from airlines with a poor record of customer service—look at the cancellation fiascos that have occurred with Southwest Airlines in late 2022 and early 2023. The future of the airline industry is still unclear. Some traders speculate further declines and want to use this opportunity to go short on airlines and airplane manufacturers. However, the worst may be behind us, creating an opportunity to buy airline stocks at a huge discount. Many airline stocks lost significant value, so the risk-reward ratio is enticing should the stocks regain their previous price levels with the promise of federal relief in coronavirus aid. Do your homework and avoid companies with vulnerable operations and balance sheets. Travel demand is expected to rise, so there’s ample room to soar into the foreseeable future. And if you’re in the market for bargain stocks, take a look at our lists ofstocks under $20,stocks under $10and evenstocks under $5. Many people are bullish on airline stocks because they believe the worst is behind us in regards to coronavirus. Yes, airline stocks are considered a cyclical stock. Benzinga’s list of favorite airline stock brokers can be found on the list above. A newsletter built for market enthusiasts by market enthusiasts. Top stories, top movers, and trade ideas delivered to your inbox every weekday before and after the market closes.