Top airline stocks for the second quarter include Copa Holdings SA (CPA), Deutsche Lufthansa AG (DLAKY), and International Consolidated Airlines Group SA (BABWF). The share prices of all three have risen by more than 30% in the past year.

Airline stocks, as represented by the U.S. Global Jets ETF (JETS) benchmark, have fallen 4% in the past 12 months, compared with a 3% gain for the S&P 500 Index.

Here are the top three airline stocks each for the best value, the fastest growth, and the most momentum. All numbers below are as of May 16.

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.

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• Air France-KLM Group: Air France provides passenger and cargo transport as well as aircraft maintenance services.
• 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. On April 27, the company reported its first-quarter earnings. Net income was $10 million, swinging from a net loss of $1.6 billion in Q1 2022. Total revenue increased by 37%, with passenger revenue gaining 40% as demand for travel returned.
• United Airlines Holdings Inc.: United Airlines is an aircraft transport, cargo, and maintenance company. United Airlines released first-quarter earnings on April 18. Their net loss shrank by 86%, amid revenue growth of greater than 50%. Passenger revenue surged 60% compared with the same quarter in 2022.

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 year-on-year 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 1,000% were excluded as outliers.

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• Singapore Airlines Ltd.: Singapore Airlines is a passenger and cargo transportation company under the Scoot and Singapore Airlines brands with a fleet of 147 aircraft as of May 2023. The company also provides engineering services.
• Sun Country Airlines Holdings Inc.: Sun Country is a low-cost airline that operates cargo and passenger flights within North and Central America. The company reported first-quarter earnings on April 27, with net income surging more than tenfold on a 21% increase in average fares and a 40% increase in charter service revenue.
• Copa Holdings: This is a Panama-based airline passenger and cargo service provider. The company provides scheduled flights to countries in North, Central, and South America, as well as the Caribbean. Copa Holdings reported its first-quarter results on May 10, with net income surging sixfold on strong air travel demand. The company's stock jumped more than 10% the next day.

Airline Stocks with the Most Momentum

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

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• Copa Holdings: See company description above.
• Deutsche Lufthansa: It operates as an airline transportation company with a fleet of more than 700 aircraft, as of the end of 2022.
• International Consolidated Airlines Group (IAG): A U.K.-based air transport company that also provides ground servicing and aircraft leasing. On May 5, the company released its financial results for the first quarter. Its net loss shrank by 89%, and total revenue jumped by 71% compared with the first quarter of 2022. The large increase in revenue was attributed to strong demand for passenger travel and lower fuel prices versus last year. IAG said in its first-quarter earnings announcement that about 80% of its expected second-quarter revenue already had been booked.

Risks of Airline Stocks

Airlines and their stock prices are subject to many external forces that the companies have little control over, from oil prices to global pandemics to aircraft crashes. The airline industry is recovering from one of its worst crises to date as the coronavirus subsides, so investors are focused on which companies will do this best. Several airlines have gone bankrupt in recent years, while others barely break even by flying unprofitable routes at low prices. Now, airlines face the possibility of a global recession that would lower revenue across the sector.

Airline stocks tend to be cyclical, which means that airline share prices are largely affected by the national economies of their home countries. Profits and share prices of cyclical companies tend to follow the ups and downs of the economy; that's why they are called cyclical. When the economy booms, sales of goods—such as plane tickets—tend to thrive. On the other hand, cyclical stocks are prone to suffer in economic downturns. Airline stocks are also volatile, more so than ever during the pandemic years. Their beta is usually greater than 1, which demonstrates both their riskiness and potential for reward to an investor.

Advantages of Airline Stocks

There are few airlines that can actually be considered dominant and stable after years of industry consolidation, so this makes it easier to invest in them, should you want to buy stock in individual companies rather than in an airline exchange-traded fund (ETF) or themed mutual fund.

Also, under normal conditions, airlines earn consistent revenue simply because there will always be a low season and a high season for traveling. Provided too many bad events don't occur close together, airline revenue will remain more or less stable.