Table of Contents
The airline industry is comprised of companies that offer a variety of air transportation and travel services for consumers and cargo. Services include flight transport, aircraft leasing, hotel booking, car rentals, and travel management services. Some big names in the airline industry include Southwest Airlines Co. (LUV), Delta Air Lines Inc. (DAL), and United Airlines Holdings Inc. (UAL). Travel restrictions, including strict social distancing rules, put in place in response to the COVID-19 pandemic has led to plunging demand for airline travel and severely impacted the airline industry this year.
Airline stocks, as represented by U.S. Global Jets ETF (JETS), an airline ETF, have dramatically underperformed the broader market. JETS has provided a total return of -37.3%, well below the Russell 1000’s total return of 15.9% over the past 12 months, as of September 15, 2020. All statistics in the tables below are as of September 16.
Here are the top 3 airline stocks with the best value, profitability, and performance.
Best Value Airline Stocks
These are the airline stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Airline Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|Chorus Aviation Inc. (CHR.TO)||CA$2.53||CA$0.4||5.6|
|SkyWest Inc. (SKYW)||34.58||1.7||10.5|
|Exchange Income Corp. (EIF.TO)||CA$32.67||CA$1.1||22.2|
- Chorus Aviation Inc.: Chorus Aviation is a Canada-based holding company that offers aviation services, including scheduled passenger services, through subsidiaries Chorus Aviation Capital, Jazz Aviation, and Voyageur Aviation. The company offers contract flying, aircraft leasing, and maintenance services. Chorus reported a 25.1% decline in net income as operating revenue fell 44.6% in Q2 2020, which ended June 30, 2020. The company said the drop in net income was due to the global impact of COVID-19, which was only partially offset by a change in unrealized foreign exchange.
- SkyWest Inc.: SkyWest is a holding company that operates regional airlines offering scheduled passenger services to destinations in the U.S., Canada, Mexico, and the Caribbean. The company reported a net loss of $25.7 million as total operating revenue dropped 53.0% in Q2 2020, which ended June 30, 2020. SkyWest said its lower results compared to the year-ago quarter were due to reduced flight schedules and lower demand as a result of the COVID-19 pandemic.
- Exchange Income Corp.: Exchange Income is a Canada-based diversified company focused on aviation and manufacturing. It provides scheduled airline and charter service as well as emergency medical services to select regions throughout Canada. The company also offers metal manufacturing goods and related services. Exchange Income announced in early August that it had completed its acquisition of Window Installation Specialists Inc., a privately-owned company for $45 million.
Most Profitable Airline Stocks
These are the airline stocks with the least year-over-year (YOY) earnings per share (EPS) declines for the most recent quarter. All other airline stocks we looked at reported losses for the most recent quarter. A company’s ability to maintain profitability in a difficult business environment can be a sign of good management and/or a strong business model.
|Most Profitable Airline Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Chorus Aviation Inc. (CHR.TO)||CA$2.53||CA$0.4||-25.0|
|Exchange Income Corp. (EIF.TO)||CA$32.67||CA$1.1||-89.2|
- Chorus Aviation Inc.: See above for company description.
- Exchange Income Corp.: See above for company description.
Airline Stocks with the Best Performance
These are the airline stocks that had the best returns or smallest declines in total return over the past 12 months out of the companies we looked at.
|Airline Stocks with the Best Performance|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Ryanair Holdings PLC (RYAAY)||85.83||19.3||35.3|
|Allegiant Travel Co. (ALGT)||138.47||2.2||-6.9|
|Exchange Income Corp. (EIF.TO)||CA$32.67||CA$1.1||-7.4|
|U.S. Global Jets ETF (JETS)||N/A||N/A||-37.3|
- Ryanair Holdings PLC: Ryanair is an Ireland-based airline company offering low fare passenger airline services to destinations in Europe. The company also offers ancillary services connected to its core air passenger service, such as non-flight scheduled services. Ryanair reported a net loss as total operating revenue fell 94.6% in Q1 of its 2021 fiscal year (FY), which ended June 30, 2020. The company said that Q1 was its “most challenging” quarter in its 35-year history due to the pandemic.
- Allegiant Travel Co.: Allegiant Travel offers travel services, including flight transport, hotel booking, car rentals, travel management, and other related services. The company serves customers worldwide. Allegiant provided a traffic report for the month of August, which indicated that its monthly revenue was down 48.4% compared to August 2019. Its load factor, an indicator measuring the percentage of available seating capacity that is filled with passengers, fell 41.1 percentage points to 44.1% compared to the same month a year ago.
- Exchange Income Corp.: See above for company description.
YCharts. “Financial Data.” Accessed Sep. 16, 2020.
Chorus Aviation Inc. “Chorus Aviation announces second quarter 2020 financial results and market update.” Accessed Sep. 16, 2020.
SkyWest Inc. “SkyWest, Inc. Announces Second Quarter 2020 Results,” Page 6. Accessed Sep. 16, 2020.
SkyWest Inc. “SkyWest, Inc. Announces Second Quarter 2020 Results,” Page 1. Accessed Sep. 16, 2020.
Exchange Income Corp. “Exchange Income Corporation Completes Acquisition of Window Installation Specialists, Inc.,” Page 1. Accessed Sep. 16, 2020.
Ryanair Holdings PLC. “RYANAIR REPORTS Q1 LOSS OF €185M AS TRAFFIC FALLS BY 99% COVID-19 GROUNDS 99% OF FLEET – 40% OF FLIGHTS RESUME 1 JULY,” Page 5. Accessed Sep. 16, 2020.
Ryanair Holdings PLC. “RYANAIR REPORTS Q1 LOSS OF €185M AS TRAFFIC FALLS BY 99% COVID-19 GROUNDS 99% OF FLEET – 40% OF FLIGHTS RESUME 1 JULY,” Page 1. Accessed Sep. 16, 2020.
Allegiant Travel Co. “Allegiant Reports August 2020 Traffic.” Accessed Sep. 16, 2020.