Investing in airline stocks isn’t for the faint-of-heart. When demand for travel goes down, airline stocks can suffer immense losses.
Not only that, but airline stocks are cyclical, meaning they move with economic ups and downs. The strongest airline companies may have enough cash reserves to weather market downturns, but many others don’t.
If the COVID-19 pandemic showed us anything, it’s this — airline companies are extremely resilient. If they can survive two years of restricted air travel, they can survive most anything.
And now that enforced lockdowns are finally lifted, airline companies could experience a much-needed resurgence. Investing in them could be a smart move.
Related: List of stocks in the TSX industrial sector
What are airline stocks?
Airline stocks are companies that provide delivery, cargo, and transportation services to consumers and businesses.
When you think of airline stocks, you might think of air carriers, like Air Canada or WestJet. However, airlines encompass a much broader range of services, including delivering time-sensitive goods and consumer packages.
Top airline stocks in Canada
Canada has a number of great airline stocks trading on the Toronto Stock Exchange (TSX). As you’re doing your research and looking for stocks to add to your portfolio, here are just three airline stocks you might want to consider.
| Airline Stock | Description |
| Air Canada (TSX:AC) | Canada’s largest airline, serving around 50 million passengers annually. |
| Onex (TSX:ONEX) | An asset management firm that owns Canada’s second-largest airline carrier, West Jet. |
| Cargojet Inc. (TSX:CJT) | An air cargo company that provides services in North America and Europe. |
1. Air Canada
Air Canada is a popular household name in Canada that — pre-pandemic — was one of the most successful airlines in the world.
Air Canada has demonstrated a robust recovery following the challenges posed by the COVID-19 pandemic. In 2023, the airline achieved record operating revenues of $21.8 billion, a 32% increase from 2022, reflecting sustained strong demand for air travel. The company reported an annual operating income of $2.3 billion, marking a significant improvement of $2.5 billion compared to the previous year.
Air Canada concluded 2024 positively, but faces volatility in early 2025 due to geopolitical tensions, macroeconomic issues, and specific company challenges, leading to a decline in AC stock. A revision in the full-year 2024 capacity and profit outlook was triggered in November by rising jet fuel costs and contract-related expenses, albeit with a still anticipated 5% year-on-year capacity increase.
As of January 27, 2025, Air Canada’s stock is trading at CAD 20 per share, with a 52-week range between CAD 14.47 and CAD 26.18. The company’s market capitalization stands at approximately $7.14 billion.
The company’s commitment to cost optimization was evident in the improved third-quarter adjusted cost metrics. With a strategy aimed at diversifying passenger and cargo services and focusing on fleet modernization, Air Canada is poised to overcome short-term hurdles, ensuring steady revenue amidst fluctuating economic conditions. For long-term investors, Air Canada’s stock holds promise for sustainable growth, making it a potentially valuable portfolio addition up to 2030, reflecting the company’s dedication to long-term expansion strategies.
2. Onex
Onex isn’t your average airline stock. Onex is a Canadian investment firm that manages private equity and credit investments. However, Onex has invested in aviation-related businesses, such as acquisition in WestJet Airlines. Onex owns Canada’s number two airline carrier, WestJet, and it recently purchased Sunwing Airlines and Sunwing Vacations, making it a strong competitor to Air Canada.
In the third quarter of 2024, Onex reported net gains of $96 million from its private equity investments, representing a 2% return for the quarter. This compares to net gains of $190 million, or a 4% return, in the same quarter of the previous year.
As of January 24, 2025, Onex’s stock is trading at CAD 113.50 per share. The company’s market capitalization stands at approximately $8.14 billion.
These financial metrics underscore Onex’s ongoing commitment to value creation and strategic investment within the private equity sector.
3. Cargojet Inc.
Some airlines carry people to destinations. Others carry cargo. Still others carry time-sensitive cargo, like prescription drugs, perishables, and other goods with short shelf lives.
Canadian-based company Cargojet is firmly in the last category, carrying time-sensitive goods between points in North America and Europe. According to the company, it transports around 1.3 million pounds of cargo each business night, roughly the weight of 100 African bush elephants. It services around 90% of Canadian household’s next-day deliveries.
Cargojet Inc., a leading provider of time-sensitive air cargo services in Canada, has demonstrated strong financial performance in recent periods. In the third quarter of 2024, the company reported total revenue of CAD 245.6 million, a 15% increase from CAD 214.0 million in the same quarter of 2023. Net income for the quarter was CAD 29.7 million, up 183% from the previous year’s third quarter, resulting in a profit margin of 12%, compared to 4.9% in 2023.
As of January 24, 2025, Cargojet’s stock is trading at CAD 123.48 per share, with a 52-week range between CAD 100.01 and CAD 144.97. The company’s market capitalization is approximately CAD 1.96 billion.
Looking ahead, CJT stock appears poised for a sustainable bull run that could extend through the latter half of the decade, as it continues its recovery from a challenging three-year sell-off. Most importantly, Cargojet has low operating costs, a strong business model, and immense growth potential. For Canadians who don’t want to invest in airlines directly, Cargojet could be a solid investment.
Are airline stocks a good investment?
Historically, airline stocks haven’t been the most steady investment. Airlines are expensive to operate. And, because airplanes guzzle large quantities of jet fuel, airlines suffer when gas prices go up.
Likewise, airlines generate more revenue when consumers have more disposable income. During hard economic times, when consumers have less money to spend, airlines often make less money.
Finally, let’s not forget that airlines were crushed by the COVID-19 pandemic, bringing many companies to the brink of bankruptcy. But it would be foolish to assume that all airline stocks are bad investments. Many are solid businesses that have outperformed the broader market.
Airline stocks have their risks, but they can have their rewards, too. Investors would be wise to consider both before either buying or dismissing them too quickly.
Should you invest in airline stocks?
The airline industry is highly cyclical, and its stocks can move up and down wildly. Historically, airline stocks have underperformed the overall market, and even when they’ve done exceptionally well, they rarely beat TSX favourites.
As long as you’re aware of their risks, however, airline stocks could present a lucrative opportunity. That might be the case now, since many airline stocks are still trading at low prices due to the double-whammy of high fuel costs and the ongoing post-COVID-19 recovery.
If you’re interested in airline stocks, be sure you start with a well-diversified portfolio. You might want to invest in some strong safe stocks first, like utility or energy companies, that could help anchor your portfolio should an economic downturn hurt the airline industry.
You could also diversify your airline holding. For instance, you could buy stock in a cargo company, like Cargojet, along with an air carrier, like Air Canada.
Finally, consider some airline stocks from the U.S., too, like Delta Airlines or United Airlines, as many international airline carriers have larger market caps than Canadian ones.