## 2025 Airline Stock Investment Guide: Which is More Worth Jumping On—US Stocks or Taiwan Stocks?

After experiencing a historic loss of $140 billion during the pandemic, the airline industry finally turned profitable starting in 2023. The International Air Transport Association (IATA) forecasts that by 2025, global air passenger numbers will officially surpass pre-pandemic levels, and by 2040, demand for air travel could double—from 4 billion to 8 billion passengers, with an average annual growth rate of 3.4%. Even Warren Buffett’s Berkshire Hathaway has begun to favor US airline stocks, deploying heavy investments in Delta Air Lines, American Airlines, and United Airlines. This signal is clear: the airline stock cycle has begun.

But the question is, should you buy US airline stocks or Taiwan airline stocks? Their volatility differs, and so do the opportunities and traps.

### What exactly are airline stocks? Why are some people rushing to buy now?

Airline stocks are shares of publicly listed airlines, categorized into two types based on their nature. One is state-owned airlines, where shareholders and management are appointed by the government, with stable internal structures (e.g., Evergreen Airlines), and relatively controllable risks. The other is privately owned airlines, operated by private investors, with more frequent changes in ownership, often showing stronger growth potential (e.g., Southwest Airlines in the US, Spring Airlines in China).

Don’t underestimate this classification. Choosing the right direction can double your gains.

### The three core factors influencing airline stock prices

**First, global economic prosperity.** This is the barometer of air travel demand. When the economy is good, business travelers and vacationers surge, airline seat occupancy rates soar, and profits skyrocket. When the economy is poor, travel shrinks significantly, and stock prices also plunge. The pandemic is the clearest example.

**Second, oil price fluctuations.** Fuel costs constitute a large part of airline expenses. When oil prices spike, airlines either raise ticket prices or face squeezed profits; when oil prices fall, it’s a direct benefit. That’s why international oil price shocks often cause sharp volatility in airline stocks.

**Third, interest rate levels.** Airlines rely on financing to expand their fleets and infrastructure. Higher interest rates mean more expensive financing, leading to scaled-back capital expenditure plans; lower rates stimulate investment and growth.

These complex variables intertwine, making it difficult for the airline industry to maintain stable profits. Competition, labor costs, union strikes, fuel volatility—any problem in these areas forces airlines to adjust strategies. This uncertainty is both a risk and an opportunity.

### Which US airline stocks are most worth watching?

Based on the latest data (as of November 13, 2025), the three most representative US airline stocks are:

**Delta Air Lines (DAL, market cap $39.49 billion, P/E 8.52)**

Headquartered in Atlanta, Georgia, dating back to 1924, it has grown into a global airline giant covering six continents and over 1,000 destinations. Delta’s key advantages are its high proportion of business and international customers, along with unique cost control in fuel, maintenance, and leasing.

Data shows that this stock has risen about 69.51% so far this year. But short-term volatility is also notable—down 3.86% in a month, with recent prices around $60.48. Morgan Stanley has listed it as a top pick, attracted by its high-end customer base and cost optimization potential. If you can tolerate moderate fluctuations, Delta is a good entry point.

**Copa Airlines (CPA, market cap $5.23 billion, P/E 8.27, up 4.28% in recent months)**

This is a leading airline in Latin America. With increasing disposable income and urbanization in the region, air travel demand has huge growth potential.

CPA’s core strength lies in operational efficiency. In Q2 2025, net profit reached $149 million, up 25% year-over-year. Key indicators are impressive: on-time rate at 91.5%, flight completion rate at 99.8%, and unit operating costs down 4.6% to 8.5 cents per seat mile. Holding $1.4 billion in cash, accounting for 39% of revenue over the past 12 months, its risk resilience is notable. It has been rated the best airline in Central America and the Caribbean by Skytrax for ten consecutive years. If you’re optimistic about emerging market growth, CPA is a low-valuation stock with growth potential.

**Ryanair (RYAAY, market cap $34.317 billion, P/E 12.72, up 43.91% in recent months)**

Europe’s largest airline group and a global low-cost carrier leader. With over 640 aircraft, operating 3,600 flights daily, and a yearly passenger volume of 207 million. It has ordered 300 new Boeing 737s, planning to increase annual passenger numbers to 300 million by 2034.

In winter 2025, Ryanair added 3 base aircraft in Milan, investing $3.1 billion, opening 5 new routes, and increasing frequency on 40 popular routes. It’s expected to transport 19 million passengers annually, up 4% year-over-year. Despite a slight dip of 0.49% on November 13, its strong market foundation keeps valuation stable. If you believe in Europe’s tourism recovery, this is the most growth-oriented choice.

### How to choose Taiwan airline stocks?

The Taiwan airline sector has three main players (as of November 13, 2025):

**EVA Air (2618, market cap NT$186 billion, P/E 6.56, down 2.2% in recent months)**

Taiwan’s leading airline, established in 1989, with Taoyuan Airport as its hub. Rated Skytrax five-star, its fleet includes Boeing 787 Dreamliners and A350s. Its network covers over 60 international destinations across Asia, Europe, North America, and Oceania.

In Q3, performance was strong: seat occupancy rate at 92.5%, domestic routes at 93.5%, and international capacity (ASK) increased 28% year-over-year. Analysts expect the full-year stock price to reach NT$37.84, still room from the November 13 close of NT$37.2. EVA is advancing three Boeing 777-300ER passenger-to-cargo conversion projects to strengthen freight capacity. It’s the most reasonably valued and fundamentally stable choice among Taiwan’s airline stocks.

**China Airlines (2610, market cap NT$162 billion, P/E 7.63, down 0.6% in recent months)**

Taiwan’s other major airline, founded in 1959, with the longest history. Part of the SkyTeam alliance, it owns subsidiaries China Trust Airlines and Tigerair Taiwan, forming a full-service and low-cost hybrid model. Fleet includes 83 aircraft (65 passenger, 18 cargo), with 1,400 weekly flights.

In Q3, passenger load factor was 86.9%, up 4.4 percentage points from 2019. International capacity increased 13% YoY, with high booking levels on key routes to Northeast Asia and North America. Stock price is NT$28.6, P/E 7.63, with analysts optimistic about valuation recovery from long-haul route expansion. Compared to EVA, China Airlines has a more stable domestic base and is accelerating international expansion.

**Starlux Airlines (2646, market cap NT$9.5 billion, P/E 48.53, down 1.05% in recent months)**

A new full-service airline in Taiwan, launched in 2020, quickly becoming a growth stock. Using Taoyuan Airport as its hub, it rapidly expanded routes to Asia and North America.

On November 13, closing at NT$42.8, up about 18% from the start of the year. In Q3, seat occupancy was 85.9%, with international capacity up 10% YoY, and domestic routes at 86.3%. The long-haul route Taipei-California Ontario has already reached 80% booking. It also added 10 Airbus A350-1000 flagship aircraft at the Paris Air Show, planning to deploy them on new routes. In April, it launched Taichung-Kobe route, further improving its Northeast Asia network. Despite a high P/E of 48.53, if you believe in long-term growth of Asian tourism, this growth premium is justified.

### How to buy airline stocks? Three approaches with different strategies

**First: Direct purchase through brokerage**

The most traditional and straightforward method. For Taiwan stocks, buy directly through domestic brokers by entering the stock code. For US or Hong Kong stocks, open an overseas brokerage account or use domestic brokers for cross-border entrustment. However, cross-border commissions are higher; if you trade frequently, opening an overseas account is recommended.

**Second: Using Contracts for Difference (CFD) to go long or short**

Compared to traditional brokers, CFDs have unique advantages: unlimited long/short positions, no commission, flexible leverage. For short-term traders with high risk appetite, CFDs can improve capital efficiency—if the stock rises 1%, profits can increase by 10%. But similarly, declines are amplified.

**Third: Diversify with industry ETFs**

A lazy approach. Buying airline industry ETFs provides instant sector exposure and risk diversification.

### The true face of airline stocks: high returns come with high risks

Many are attracted by the high elasticity of airline stocks, but it’s essential to face their risks:

**Advantages:**

1. High elasticity during economic recovery. When international tourism and business travel rebound, airline profits usually improve significantly. The rapid rebound from 2022-2024 is a vivid example.

2. Major airlines have barriers to entry. Routes, traffic rights, fleets, pilots—these are not easily scaled up quickly, giving large airlines an advantage in their home markets. The four major US carriers nearly monopolize long-haul and international hub routes.

3. Revenue sources are diversified. Modern airlines don’t rely solely on ticket sales—they also earn from baggage fees, seat upgrades, loyalty programs, cargo, co-branded credit cards, etc. This provides resilience during off-peak seasons.

4. Some companies offer attractive dividends. Financially healthy airlines tend to pay dividends during stable periods, appealing to investors seeking cash flow.

**Disadvantages:**

1. Rigid cost structure. Fuel, labor, and maintenance are the three major cost black holes. When oil prices rise or labor shortages occur, profits are squeezed. This is why airline stocks are classic cyclical stocks—soar during boom times, plunge during downturns.

2. High debt and capital expenditure. Fleet, terminals, equipment costs are extremely high, and airlines generally carry high debt ratios. When the cycle reverses or interest rates rise sharply, financial pressure increases. During the pandemic, many US airlines had to raise capital significantly due to excessive debt, severely diluting stock value.

3. Vulnerable to black swan events. Pandemics, geopolitical crises, weather issues, airspace restrictions—these unpredictable events can cause flight and passenger volume to plummet, often leading to sharp stock declines. The airline industry is one of the most fragile sectors.

### Three key timing moments for airline stock investments

**Timing 1: End of the economic cycle**

Airlines are cyclical stocks, following periods of boom and bust. To make big money in airline stocks, you must enter during economic expansion. Historically, airlines earn most profits during growth phases. But when the economy slows, demand for flights drops, and competition from low-cost carriers intensifies, squeezing industry margins.

**Timing 2: Diversify across regions**

Since airlines are tied to the global economy, diversifying investments across different regions can significantly reduce risk. Don’t put all your chips into one area.

**Timing 3: Focus on companies with strong cash flow**

The airline industry is capital-intensive, requiring substantial cash reserves to survive downturns. Before investing, ensure the target company has healthy cash reserves. Copa Airlines holding $1.4 billion in cash and Evergreen Airlines maintaining high seat occupancy are signals of strong cash flow.

In 2025, the door to airline stocks is opening. The key is not to follow the herd blindly but to choose suitable stocks and timing based on your risk tolerance.