My 5 Best Airline Stocks To Buy And Ride The Summer Travel Boom

Forbes

a day ago

Taking a chance on airlines in 2025 despite an uncertain outlook could pay handsome rewards.
On the heels of a busy travel weekend, airline stocks may be on your mind. AAA projected 5.84 million travelers would fly domestically over the July 4 weekend, beating 2024's record-breaking tally. AAA also estimated travelers paid 4% more this year for round-trip domestic flights.
More travelers and higher prices bode well for airlines. Does this mean it's time to invest in air travel? Learn the high-level pros and cons of airline investing and meet five of the best airline stocks below.
Why Invest In Airline Stocks
Airlines have not been stellar investments in recent years. The Dow Jones U.S. Airlines Index is down about 25% since January 2020, just before the pandemic temporarily halted travel demand. The index's last extended growth trend was from 2012 to 2015.
Earlier this year, analysts predicted 2025 would be the year airlines would end the slump. Travel demand was high and on the rise. The airlines were, on the whole, financially and operationally healthy. Profit and growth expectations were upbeat.
Unfortunately, the optimism has faded, partly due to the new and aggressive U.S. tariff policy. Incoming travel to the U.S. has declined since President Donald Trump announced reciprocal tariffs in early April. Consumer spending has also eroded, which sets the stage for a broader travel slowdown. Airlines have acknowledged this possibility by reducing earnings outlooks for the year.
Analysts at J.P.Morgan and McKinsey aren't convinced tariff-related headwinds spell doom for the airlines this year. A McKinsey report noted healthy trends that could help airlines weather soft demand, such as conservative capacity management and improving revenue opportunities. A J.P.Morgan analysis highlighted airlines' healthy liquidity levels and reasonable capital access as signs of financial resilience.
Investors who choose airline stocks this year believe the positive will outweigh the negative to produce capital gains over time.
Best 5 Airline Stocks To Ride The Summer Travel Boom
The table below highlights six airline stocks analysts love.
A review of each airline follows. Metrics are sourced from company reports and stockanalysis.com.
1. Delta Airlines (DAL)
Delta by the numbers:
Delta Airlines, headquartered in Atlanta, offers premium air travel to 290 destinations globally. Key markets include Amsterdam, Boston, Detroit, Los Angeles, New York, Paris and Tokyo.
Delta has received two credit rating upgrades since December 2024, one from S&P Global Ratings and one from Moody's. Upgrade reports cited Delta's strong balance sheet, good cash flow and declining debt balance. The airline now has investment-grade ratings from three rating agencies.
Delta's conservative financial approach is an advantage in these uncertain times. In response to a declining growth outlook, Delta's leadership team made moves to protect cash and profitability—including reducing planned capacity growth and carefully monitoring costs.
For the first quarter of 2025, Delta reported operating revenue of $14 billion and EPS of $0.37.
Delta is one of two airlines on this list that pays dividends. In June, Delta announced a quarterly dividend of $0.1875 per share, which translates to a yield of 1.5%.
2. United Airlines (UAL)
United Airlines by the numbers:
United Airlines, based in Chicago, provides air transport to 360 destinations in six continents. The airline is the leading carrier across the Atlantic and Pacific, with direct flights from the U.S. to Asia, Australia, Europe, Latin America, the Middle East and Africa.
United Airlines has a strong track record of outperforming EPS expectations, even in tough quarters. Brand loyalty has been a factor and will continue to drive revenue for UAL. In the first quarter, premium cabin and loyalty were two of the airline's fastest-growing revenue streams. The performance helped produce UAL's best first quarter since the pandemic.
Also in the first quarter, United increased its customer satisfaction scores 10% versus the prior year. Strong operational performance contributed. United had competitive on-time departure and arrival rates in the quarter, including top rankings in on-time departures from San Francisco, Los Angeles and Washington, D.C.
United's first quarter operating revenue was $13.2 billion and diluted EPS was $1.16.
Like Delta, United Airlines is adjusting to a more conservative demand outlook for the rest of 2025. Moves include efforts to optimize planned domestic capacity and fleet utilization.
3. Alaska Air Group (ALK)
Alaska Air the numbers:
Alaska Airlines, based in Seattle, flies passengers and cargo to 140 destinations in North and Central America, Asia and the Pacific. Since purchasing Hawaiian Airlines in September 2024, Alaska Airlines has a leading market share in Hawaii to complement its strong West Coast presence.
Alaska has historically been a low-cost airline with a uniform service offering. This approach, combined with excellent cost discipline, produced industry-leading pretax margins for years.
The airline is maintaining its cost discipline but evolving the broader strategy to keep pace with customer preferences and drive new profit opportunities. Initiatives in progress include new seat classes and elevated in-flight experiences. Alaska Airlines is also investing in its key markets—Seattle, Portland and San Diego—and leveraging its expanded position in Hawaii to build a strong intercontinental business. The high-level goal is to produce $1 billion in incremental profit by 2027.
In the first quarter, ALK reported $3.1 billion in operating revenue and a GAAP diluted loss per share of $1.35.
4. Copa Holdings, S.A. (CPA)
Copa Holdings by the numbers:
Copa provides air transport to passengers and cargo from its Panama hub to 82 destinations in the Caribbean and North, Central and South America. CPA also operates low-cost provider Wingo, which serves Columbia.
Copa is a well-run airline with a strong reputation for cost control and operational excellence. The airline has been recognized as "The Most Punctual Airline in Latin America" 10 times by aviation analytics company CIRIUM. CPA's 2024 punctuality rate of 88.22% was the highest in Latin America and the third highest globally.
The McKinsey industry analysis correlates strong on-time performance with good financial results. That relationship holds for Copa. The company enjoys a 20%-plus operating margin, outperforming the 5% to 10% margins produced by other airlines on this list.
The cost discipline has contributed to the company's financial strength, which supports growth initiatives and a generous dividend. In the first quarter, Copa produced operating revenue of $899.2 million and EPS of $4.28. At quarter-end, the company had $1.3 billion in cash and total debt of $1.9 billion. The airline plans to increase capacity this year by 7% to 8%.
Copa pays a quarterly dividend of $1.61, for a generous yield of 5.8%.
5. Sun Country Airlines (SNCY)
Sun Country Airlines by the numbers:
Sun Country Airlines is a low-cost carrier based in Minnesota. The airline has three business lines: scheduled passenger service, passenger charter service and cargo service. Sun Country has built flexibility into its business model, by shifting its route network according to customer demand and sharing pilot resources across business lines.
Sun Country went public in 2021, when it produced $623 million in annual revenue. By 2024, the airline's revenue had grown to over $1 billion. Sun Country's revenue diversification and operational flexibility have been contributing factors.
The passenger charter business caters to sports teams, casinos and the Department of Defense. The cargo business has a contract with Amazon's Prime Air subsidiary that expires in 2030 with options to extend until 2037. These two businesses produce 30% of the Sun Country's revenue and, perhaps more importantly, provide business stability.
Charter and cargo growth helped offset soft scheduled service revenue in the most recent quarter. Despite the challenging conditions, Sun Country reported record revenue of $327 million, adjusted operating income of $60 million and an improved adjusted operating margin. First quarter diluted EPS was $0.66, up from $0.64 in the year-ago quarter.
Sun Country's board also recently approved a $25 million share repurchase authorization.
Bottom Line
Taking a chance on airlines in 2025 despite an uncertain outlook could pay handsome rewards. Opt for companies with good cost discipline, ample liquidity and a commitment to operational excellence.
For more investing ideas to complement your airline exposure, see best stocks for 2025.