In the wake of the pandemic's disruption to global travel, the question of investing in airline stocks has become more important to investors. This guide will highlight the leading airlines in North America and Europe, their high-level fundamentals, explain how to analyze the airline industry, and tell you what to look for when diving deeper into individual stocks.

The biggest US and Canadian airline stocks of 2024

These are the biggest North American airlines, based on market share, compiled by Bloomberg.

United Airlines

United Airlines (UAL) screens as cheap relative to airline peers, with a price-to-earnings (P/E) ratio of 3.6x. Its return industry-leading sales growth track record screens attractively for "quality". United's risk metrics are in line with the average of its peers and analysts are positive on the stock.

United Airlines overview

Delta Air Lines

Delta Air Lines' valuation is broadly in line with peers, while its sales growth track record and profit margin is industry-leading – suggesting the shares could justify a premium compared to other airlines. What's more, Delta is one of the least volatile airlines in the peer group, which might help explain why analysts are so positive on the stock.

Delta Air Lines overview

American Airlines

Shares of American Airlines trade at an enterprise value to sales (EV/sales) ratio of 0.7 and a P/E of 6 – higher than the average of its rivals. Considering the company's sales growth and profit margin is lagging those peers, that valuation may be difficult to justify. American Airlines also screens as riskier than other airlines given its higher volatility and debt relative to earnings. That might help explain why analysts are neither positive or negative on the stock right now.

American Airlines overview

Southwest Airlines

Southwest Airlines trades at a big premium to other airlines on a P/E basis, but is in line on EV/sales. That might give investors pause, given the company's negative operating profit margin puts it below the industry average. In Southwest's favor, however, is its lower beta than other airlines and the fact it doesn't have any debt, making it a less risky prospect than others.

Southwest Airlines overview

Air Canada

Air Canada's main stock market listing is in its local Toronto, but we've looked at the US listing here for comparability. The stock is slightly cheaper than the peers on both EV/sales and P/E ratios, and is supported by a high free cash flow (FCF) yield. It screens well for quality, given high returns on capital which is supported by averages sales growth but above-average profit margins. Air Canada appears less risky than peers, thanks to its lower volatility, debt, and beta.

Air Canada overview

The biggest European airline stocks of 2024

These are the biggest European airlines, based on market share, compiled by Bloomberg. We've looked at their US listings for comparability, but it's worth noting that the companies' local stock market listings likely offer better liquidity.

Deutsche Lufthansa

Deutsche Lufthansa, as its name suggests, is listed in Germany. It appears slightly cheaper than other European airlines based on EV/sales, perhaps helped by its FCF yield. On quality metrics, Lufthansa falls short: its negative sales growth and profit margin is worse than peers.

Lufthansa overview

Air France-KLM

Air France-KLM – unsurprisingly, based in France – trades at an EV/sales ratio of 0.4, in line with the average. That stands to reason given its profit margin and risk metrics are broadly in line with the peer group average.

Air France-KLM overview

International Consolidated Airlines Group

International Consolidated Airlines Group (IAG) is both British and Spanish. Its slightly higher EV/sales and slightly lower dividend yield compared to peers suggest IAG trades at a small premium to peers. The company's grown its sales at the same rate as its peers, but its stock is more volatile.

IAG overview

Ryanair

Ireland-based Ryanair trades at a premium to the European airline industry: its EV/sales ratio is 0.9 and P/E ratio is 8.4, supported by a 2.5% dividend yield and 6.5% FCF yield. That seems justified given Ryanair's market-leading sales growth and profit margin. And since Ryanair is debt-free, it's a less risky prospect than others in the industry.

Ryanair overview

Easyjet

UK-based Easyjet trades at a lower-than-average EV/sales multiple but a higher-than-average P/E multiple than rivals. That's partially supported by its above-average sales growth track record and lower volatility than peers.

Easyjet overview