Here’s Why Analysts Say It’s a Good Time to Buy Airline Stocks

Analysts are increasingly bullish on airlines going into 2025, with the major U.S. companies fighting to build brand loyalty in a strong demand environment. 

Deutsche Bank raised its earnings projections this quarter for 10 of the 11 U.S. airlines it covers in a note Wednesday, writing that airlines “are now competing on service rather than price” with the introduction of premium product offerings to attract customers.

“We think the de-commoditization of air travel is not only good for customers, but can be good for the bottom-line and provide stability to the industry,” the bank added. 

The news helped lift shares of the S&P 500’s airlines industry, which was recently up more than 1%. The U.S. Global Jets ETF (JETS), which includes airline shares, also rose.

Morgan Stanley likened airlines’ strategies to the business models of companies that sell smartphones and razors, with brands competing to earn customer loyalty and use that to generate ancillary revenues for years.

Next year could bring with it “a perfect storm of tailwinds that essentially propels the industry to make money,” the firm said, raising its price targets for United Airlines (UAL), American Airlines (AAL) and Alaska Air Group (ALK), among others. 

Alaska Airlines Plan Impresses Analysts

Alaska Air shares have jumped since the company unveiled a strategic plan Tuesday aimed at creating $1 billion in incremental profit over three years. The plan comes after the September completion of its $1.9 billion purchase of Hawaiian Airlines.

The Alaska Airlines operator is Morgan Stanley’s top-rated airline in 2025, taking the top spot from Delta Air Lines (DAL). The firm raised its price target to $90 from $70, which is a 44% premium even after shares rose to $62.60 intraday Wednesday. 

UBS analysts raised their price target for the airline to $81 from $72 and maintained a “buy” rating. The firm is optimistic about the strategic plan, noting that the combined network “supports additional growth and investment” in domestic West Coast destinations as well as international destinations including Tokyo and Seoul.