Can you buy airline stocks? The three major investment directions worth considering in 2026

In recent years, especially after the COVID-19 pandemic, the global aviation industry has experienced intense shocks and recoveries. Is now the time to buy airline stocks? This question needs to be examined from multiple perspectives. Currently, as global travel demand steadily recovers, airline stocks indeed hold investment value, but investors must clearly understand the associated risks and opportunities.

Industry Recovery Confirmed, Investment Value of Airline Stocks Emerges

According to the International Air Transport Association (IATA), by 2025, the number of global passengers will officially surpass pre-pandemic levels. It is projected that by 2040, demand for air travel will double, increasing from 4 billion to about 8 billion passengers, with an average annual growth rate of 3.4%. This data provides solid support for the future prospects of airline stocks.

After experiencing a historic loss of $140 billion during the pandemic, the airline industry began returning to profitability in 2023, with air travel flourishing again. Prominent investors like Warren Buffett and his Berkshire Hathaway are now taking significant positions in companies such as Delta Air Lines (DAL), American Airlines (AAL), and United Airlines (UAL). This shift reflects a renewed recognition among professional investors of the long-term value of airline stocks.

Global and Taiwan Airline Market Landscape: Risks and Opportunities Coexist

Understanding the Nature of Airline Stocks

Airline stocks refer to shares issued by publicly traded airlines, categorized into state-owned and private companies. State-owned airlines (e.g., Taiwan’s EVA Air) tend to have stable internal structures and are less prone to corporate crises, making them suitable for investors seeking stable returns. Private airlines (e.g., Southwest Airlines in the US, Ryanair in Europe) often have more frequent ownership changes but enjoy greater operational flexibility.

Key Factors Driving Airline Stock Fluctuations

When considering whether to buy airline stocks, investors must understand three core drivers:

First is global economic health. During recessions, consumers tend to cut back on travel expenses; during growth periods, disposable income increases, boosting travel spending.

Second is oil price fluctuations. Fuel costs constitute a large portion of airline expenses. When oil prices surge, airlines must raise ticket prices to offset costs; when prices fall, profits improve and consumers benefit from lower fares.

Third is interest rate levels. Rising interest rates increase financing costs, impacting airline capital expenditures; falling rates stimulate investment and growth.

Selected Targets and Portfolio Strategies: How to Choose Suitable Airline Stocks

US Airline Market: Three Top Picks

Delta Air Lines (DAL) is a leading global carrier, founded in 1924, now serving over 1,000 destinations across six continents. The company has a high proportion of business travelers and international routes, with significant cost control advantages. Recently, its stock has hovered around $60, showing steady gains over the past year.

Copa Holdings (CPA) is a top Latin American airline benefiting from increased disposable income and urbanization in the region. Operating through Panama City as a hub, it offers 327 flights daily to 78 destinations in 32 countries. Recent financial reports show a 25% year-over-year net profit increase, with ample cash reserves and ongoing operational efficiency improvements.

Ryanair Holdings (RYAAY) is Europe’s largest airline group and a well-known low-cost carrier. With a fleet of over 640 aircraft and 207 million passengers annually, the company has ordered 300 new Boeing 737s and plans to increase annual passenger volume to 300 million by 2034, further consolidating its market leadership.

Taiwan Airline Market: Three Key Choices

EVA Airways (2618) is one of Taiwan’s two major airlines, renowned for five-star service, with a modern fleet including Boeing 787 Dreamliners. In Q3, its passenger load factor reached 92.5%, with international capacity up 28% year-over-year, and bookings on Europe, North America, and Southeast Asia routes continuing to rise.

China Airlines (2610), Taiwan’s other major airline, established in 1959, operates 83 aircraft. In Q3, its passenger load factor was 86.9%, a 4.4 percentage point increase from pre-pandemic levels, with international capacity up 13% year-over-year.

Starlux Airlines (2646) is a new full-service Taiwanese carrier that has grown rapidly since launching in 2020. Its stock recently broke through NT$42.8, with a market cap exceeding NT$95 billion, an 18% increase since the start of the year, making it a star growth stock in the airline sector.

How to Invest in Airline Stocks

Traditional Brokerage Purchase

Investors can buy airline stocks by opening an account with a brokerage and entering the stock code. Taiwanese airline stocks are directly tradable through domestic brokers; US and Hong Kong stocks require opening accounts with overseas brokers or using cross-border trading. For frequent trading, overseas broker accounts are recommended to reduce transaction fees.

CFD Trading

Contracts for Difference (CFDs) offer flexible options for long and short positions, with no commission and high leverage. Suitable for investors with risk tolerance and short-term trading strategies, but require proper risk management to maximize capital efficiency.

Three Major Challenges in Airline Stock Investment

Challenge 1: High Cost Structure and Economic Cycles

Airlines face three main costs: fuel, labor, and maintenance. Rising oil prices or labor shortages can squeeze profits. As typical cyclical stocks, airline shares tend to surge during economic booms and plummet during downturns, making them highly volatile for novice investors.

Challenge 2: High Debt and Cash Flow Pressure

Aircraft, terminals, and equipment are capital-intensive, leading to high leverage. During downturns or rising interest rates, financial pressures intensify. Historically, many US airlines had to raise significant capital during the pandemic due to excessive debt, diluting share value.

Challenge 3: Unpredictability of Black Swan Events

External shocks such as oil price spikes, geopolitical crises, weather events, and airspace restrictions can severely impact the industry. These unpredictable events often cause sharp declines in flight volume and passenger numbers, leading to volatile stock prices.

Timing and Allocation Strategies for Airline Stock Investment

Seize the Business Cycle

Airline stocks are cyclical, following boom and bust patterns. The best time to buy is near the end of an expansion phase. Historically, airlines earn most profits during economic growth; positioning before the peak can yield higher returns.

Diversify to Reduce Risks

Since airline stocks are closely tied to global economic health, diversifying across regions can mitigate single-market risks. A balanced portfolio should include different business models, such as full-service and low-cost carriers.

Prioritize Companies with Strong Cash Flows

As capital-intensive businesses, airlines require substantial cash reserves to survive long-term downturns. Focus on companies with healthy cash flow, manageable debt, and solid assets—key indicators of investment value.

Multi-Dimensional Evaluation of Airline Stocks

Airline stocks have unique investment characteristics. Advantages include high growth potential during travel demand recovery, market dominance of major carriers, diversified revenue streams (baggage fees, upgrades, loyalty programs, cargo), and some paying dividends. Disadvantages include high costs during downturns, high debt and capital expenditure pressures, and vulnerability to external shocks like oil prices, pandemics, and geopolitical issues.

Final Judgment on Airline Stock Investment in 2026

Can airline stocks be bought? The answer is: Yes, but with clear investment goals and risk awareness.

Long-term value investors optimistic about sustained global economic growth and travel demand recovery can focus on financially sound, cash-rich large airlines, adopting dollar-cost averaging and diversification to manage short-term volatility.

Short-term traders may seek to capitalize on cycle turning points, employing precise technical analysis and risk controls.

Regardless of approach, investing in airline stocks requires a deep understanding of economic cycles, industry fundamentals, and risk management. With thorough research and preparation, airline stocks are indeed worth considering for your portfolio.