Recently, many people have asked me if airline stocks are a good buy. Actually, this is a pretty good question because airline stocks are indeed an interesting investment target, but it's not that simple.

First, let's talk about why airline stocks are worth paying attention to. The airline industry has experienced a severe blow from the pandemic, but now it is in a recovery phase. The International Air Transport Association (IATA) estimates that global air passenger numbers will double by 2040. This means that as long as the economy continues to recover, the profit margins for airlines are still quite substantial. Moreover, you'll notice that major carriers like Delta and American Airlines have clear monopoly advantages in their respective markets, making them not so easily shaken.

There are also quite a few good options here in Taiwan. Evergreen Airlines, as one of Taiwan's leading airlines, performed well at the end of last year. Its fleet is modernizing, and international routes are expanding. China Airlines has established a solid market position through diversified branding strategies (including Mandarin Airlines and Tigerair Taiwan). Plus, there’s StarLux Airlines, which, although relatively new, as an emerging full-service carrier, has considerable growth potential.

However, the other side of the question—can you buy airline stocks—is the risk involved. The cost structure of the airline industry is very rigid—fuel costs, labor costs, fleet maintenance—these are all fixed expenses. As soon as oil prices rise or the economy dips, profits are squeezed immediately. Additionally, airlines generally carry high debt levels; if interest rates rise or the economy reverses, financial pressure can become significant. Events like pandemics, geopolitical tensions, and weather disasters are also quite impactful black swan events for airline stocks.

So, my view is that airline stocks can be bought, but it depends on your risk tolerance and investment strategy. If you're a long-term investor optimistic about the global travel recovery trend, you might consider allocating to some financially stable airlines. But if you're a short-term trader or risk-averse investor, you should be more cautious. Most importantly, don’t put all your chips into airline stocks—diversify your investments, especially across different regions and carriers.

When selecting stocks, I recommend focusing on cash flow. Airlines are capital-intensive industries that require large amounts of cash to weather downturns. Airlines with ample cash reserves, reasonable debt levels, and a high proportion of international routes tend to be more resilient. For example, Delta Airlines is favored by Wall Street because of fuel hedging and a high share of business travelers.

In summary, airline stocks can be bought, but you need to choose the right timing, the right companies, and manage risks well. Approaching during the late stage of an economic cycle often presents a good entry point, as airline profits tend to be most robust then.