Top Airline Stocks for Q4 2022

ATSG is top for value and performance while AAL is top for growth

The airline industry is composed 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 U.S. airline industry include Southwest Airlines Co., Delta Air Lines Inc., and United Airlines Holdings Inc.

The COVID-19 pandemic brought air travel to a near-halt. However, it is roaring back as global economies reopen and the effects of the pandemic begin to fade. Both leisure and business flights have surpassed pre-pandemic levels this year. However, surging fuel costs are weighing on airlines' earnings.

Airline stocks, as represented by the U.S. Global Jets ETF (JETS), an airline exchange-traded fund, have underperformed the broader market. JETS has provided a total return of -20.2% over the past 12 months, below the -9.8% total return of the S&P 500 Index.

Here are the top three airline stocks in the categories of best value, fastest growth, and best performance. The market performance numbers above and all statistics in the tables below are as of Sept. 14, 2022.

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 that you’re paying less for each dollar of profit generated.

Best-Value Airline Stocks
  Price ($) Market Capitalization (Market Cap) ($B) 12-Month Trailing P/E Ratio
Air Transport Services Group Inc. (ATSG) 27.40 2.0 10.5
SkyWest Inc. (SKYW) 19.12 1.0 11.3
Copa Holdings SA (CPA) 75.43 3.0 11.7

Source: YCharts

  • Air Transport Services Group Inc.: Air Transport Services Group provides aircraft leasing as well as cargo and passenger air transportation services. It also offers related services to domestic and foreign air carriers. The company reported Q2 2022 earnings on Aug. 4. Net earnings fell year-over-year (YOY) on sizable revenue growth. Strength in freighter leasing was offset by a significant increase in operating expenses.
  • SkyWest Inc.: SkyWest offers airline services through its subsidiary SkyWest Airlines and aircraft leasing services through its subsidiary SkyWest Leasing. The company flies travelers to destinations throughout North America.
  • Copa Holdings SA: Copa Holdings is a Panama-based provider of airline passenger and cargo services. The company provides scheduled flights to countries in North, Central, and South America as well as the Caribbean. In mid-September the company reported monthly traffic statistics for August 2022. For that month, consolidated capacity as represented by available seat miles was 0.4% higher than August 2019. Revenue passenger miles was also slightly up relative to August 2019.

Fastest-Growing Airline Stocks

These are the top airline stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and most recent quarterly YOY earnings per share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.

Fastest-Growing Airline Stocks
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
American Airlines Group Inc. (AAL) 14.03 9.1 2,170 79.5
Ryanair Holdings PLC (RYAAY) 68.73 15.6 N/A (see company description) 520.6
Air Canada (AC.TO) CA$18.72 CA$6.7 N/A (see company description) 375.6

Source: YCharts

  • American Airlines Group Inc.: American Airlines Group is a holding company that, through subsidiaries, provides network air carrier services. It offers air transportation services for passengers and cargo. The company reported Q2 2022 earnings on July 21. Net income soared by more than 25-fold from the year-earlier quarter on substantial revenue growth. Strong domestic leisure travel and improving corporate and government revenue helped to fuel performance.
  • Ryanair Holdings PLC: Ryanair Holdings is an Ireland-based ultra-low-fare airline. It provides short-haul, point-to-point routes across Europe and to select destinations in Africa and the Middle East. Because Ryanair's EPS went from negative to positive, it does not have an EPS growth figure in the table above.
  • Air Canada: Air Canada is the largest Canada-based airline, providing scheduled passenger air service within Canada and internationally. On Aug. 2 the company reported Q2 2022 earnings results. Air Canada posted the narrowest quarterly operating loss since the start of the COVID-19 pandemic, as operating revenue grew by nearly fivefold YOY. Air Canada does not have an EPS growth figure in the table above because its EPS was negative.

Airline Stocks with the Best Performance

These are the three airline stocks that had the best returns or smallest declines in total return over the past 12 months of the companies we looked at.

Airline Stocks with the Best Performance
  Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
Air Transport Services Group Inc. (ATSG) 27.40 2.0 3.9
Copa Holdings SA (CPA) 75.43 3.0 -2.7
Spirit Airlines Inc. (SAVE) 22.99 2.5 -6.0
S&P 500 N/A N/A -9.8
U.S. Global Jets ETF (JETS) N/A N/A -20.2

Source: YCharts

  • Air Transport Services Group Inc.: See above for company description.
  • Copa Holdings SA: See above for company description.
  • Spirit Airlines Inc.: Spirit Airlines is a budget airline providing unbundled fares. Passengers can opt to pay for a variety of travel options often included in the cost of tickets for other airlines. It serves destinations in the U.S., the Caribbean, and Latin America. In the two-month period beginning June 5, Spirit operated over 44,000 flights with a completion factor of 99.2%, placing it among the best-performing airlines in terms of that metric for the summer.

The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.

Article Sources
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  1. CNBC. "For the First Time Since the Pandemic, Leisure and Business Flights Surpass 2019 Levels."

  2. CNBC. "Get Ready for Higher Fares: Airlines Bet Surge in Travel Demand Will Help Offset Fuel Costs."

  3. YCharts. “Financial Data.”

  4. Air Transport Services Group Inc. "ATSG Reports Strong Second Quarter 2022 Results," Pages 1, 5.

  5. Copa Holdings SA. "COPA HOLDINGS ANNOUNCES MONTHLY TRAFFIC STATISTICS FOR AUGUST 2022."

  6. American Airlines Group Inc. "American Airlines Reports Second-Quarter 2022 Financial Results."

  7. Air Canada. "Air Canada Reports Second Quarter 2022 Financial Results," Page 1.

  8. Spirit Airlines Inc. "Spirit Airlines Delivers Record Summer 2022 Operational Performance."

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