Investing in airline stocks isn’t for the faint of heart. The Canadian industry has mostly recovered from the pandemic: domestic travel volumes in 2025 are running ahead of pre-pandemic levels while total passenger traffic across major hubs is near 2019 figures, despite softening travel to the U.S.
Air carriers have shown they can rebound, but the business remains highly cyclical. Recent quarterly results from Air Canada illustrate a mixed picture: solid margins and positive cash flow in Q3 2025, but profitability was dented by flight cancellations and weaker U.S. travel demand. Capacity decisions, route mix, and cost control are now central to who wins and who falls behind.
Costs are a key watch item for investors. Jet fuel price trends and the growing push toward sustainable aviation fuels are changing airlines’ cost math, while labour shortages from pilots and crew continue to constrain schedules and raise unit costs in some markets. At the same time, ancillary revenue (seat-upsells, baggage, subscriptions and loyalty monetization) is a growing profit driver that helps offset fare pressure.
For investors, that mix of recovery, cost volatility, and structural revenue shifts means careful stock selection matters. Below we profile the top Canadian airline stocks going into 2026, highlighting operational strengths, balance-sheet resilience, and strategic moves that matter for shareholder returns.
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, offering extensive global routes and carrying roughly 50 million passengers each year across international and domestic markets. |
| Onex (TSX:ONEX) | A major asset manager and owner of WestJet, Canada’s second-largest airline, providing broad leisure and domestic travel options through its aviation portfolio. |
| Cargojet Inc. (TSX:CJT) | A leading air cargo carrier specializing in overnight, time-sensitive freight services across North America and international routes, including key connections to Europe. |
1. Air Canada
Air Canada (TSX:AC) remains the country’s flagship carrier and has staged a meaningful recovery since the pandemic. The airline is pursuing a focused growth strategy built around strengthening its international network. Air Canada is expanding successful routes such as Vancouver–Bangkok to year-round service while adding new long-haul connections to Shanghai, Budapest, and increasing frequencies to Prague. These initiatives aim to establish Air Canada as a global carrier of choice by deepening access to high-demand European and Asian markets.
Despite these promising expansions, the airline faces escalating structural costs. Air Canada’s adjusted cost per available seat mile (CASM) rose 15% to 14 cents, driven by higher labour costs, airport fees, and potential fuel increases. New 2025–2026 union agreements will bring another step-up in expenses, creating pressure in what is already a capital-heavy, intensely competitive industry.
Valuation reflects these mixed signals. While the stock appears inexpensive at around nine times next year’s expected earnings, recent earnings misses suggest forecasts may be too optimistic. Adjusting for more realistic expectations, the multiple moves closer to 16 times, a level that better reflects ongoing risks. Even so, Air Canada has reduced debt, grown free cash flow, and may benefit from seasonal strength in late 2025 and mid-2026. With shares trading near $18–$20, analysts see potential upside toward $22 in early 2026 or even $25 by summer if travel trends remain stable.
For investors, Air Canada remains a cyclical, higher-risk opportunity. The stock offers plausible near-term upside supported by expanding routes, improved balance sheet strength, and a path back to more consistent profitability.
2. Onex
Onex isn’t a traditional airline stock, but it has major influence in Canada’s aviation sector through its ownership of WestJet — the country’s second-largest airline — as well as Sunwing Airlines and Sunwing Vacations. Beyond aviation, Onex is one of Canada’s largest private equity and asset management firms, overseeing about $55.9 billion in private equity and credit assets.
The company continues to build long-term value through strong liquidity, an active buyback program, and a $1.5 billion cash cushion. Its transformational acquisition of Convex is expected to strengthen shareholder value, with Convex growing gross written premium roughly 22% annually since 2022. Onex also formed a new strategic partnership with AIG, which includes a $2 billion commitment to its funds and is expected to generate an additional $15–20 million in fee-related earnings.
Recent financials show solid momentum. In Q2 2025, net profit rose 36% year over year to US$229 million, driven by US$231 million in investing gains and US$36 million from asset management. Its credit segment continues to outperform, pricing 22 CLO transactions through October and expanding $10.7 billion in fee-generating assets. As of early 2025, Onex shares trade around $116.58 with a market cap near $7.9 billion after a 23% rally over the past year.
There are still challenges. Fee-related earnings remain modest at $1 million year-to-date, and losses in Onex Partners IV offset gains elsewhere in the PE portfolio. The Convex acquisition will make up roughly 42% of Onex’s balance sheet, increasing exposure to market cyclicality and putting some pressure on future liquidity. Even so, strong deal flow, fundraising momentum, and steady credit performance position Onex as a durable long-term holding.
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.
2025 has brought challenges, with softer global trade and weaker ACMI and Charter demand driving Q3 revenue down about 10.5% year over year and net earnings sharply lower than 2024. The stock is down roughly 25% year to date, though EBITDA margins remain strong, supported by contracts with major partners like Amazon and DHL.
Long-term trends remain favorable. Rising e-commerce and supply-chain speed requirements position Cargojet to benefit once shipping volumes rebound. Its capital-light growth strategy, renewed client agreements, and $1.40 quarterly dividend enhance its appeal for income-focused and long-term investors.
Valuation suggests a potential entry point, with a P/E of 9.6 and forward EV/EBITDA of 6.4, below its five-year average of 8.9. Seasonal demand and normalized industry conditions could drive meaningful upside, making Cargojet a solid long-term alternative to passenger airlines.
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.