Lufthansa is one of five airline stocks to watch, according to Foolish investors rating the major carriers. Photo credit: Benjamin Beyers for The Motley Fool.

Airline stocks are supposed to be terrible investments, right? Then why is the group of 20 airline stocks we're watching in Motley Fool CAPS up 38.1% over the past year? The answer, of course, is that some airlines are better than others.

Here are the top five rated, according to Foolish investors who've taken the time to rate airline stocks in CAPS:

AirlineCAPS Stars (out of 5)2014 Revenue Growth1-Year Stock Return
Deutsche Luftansa AG (NASDAQOTH:DLAKY) **** (0.1%) (37.9%)
JetBlue (NASDAQ:JBLU) **** 6.9% 100.3%
Southwest Airlines (NYSE:LUV) **** 5.1% 27.3%
Copa Holdings (NYSE:CPA) **** 3.7% (40.3%)
Virgin America (NASDAQ:VA) *** 4.6% (3.9%)

For context, consider that the International Air Transport Association (IATA) forecats 20 years of 4.1% average growth in passenger traffic. Carriers growing revenue faster than that benchmark may be doing a better job filling seats or optimizing fares. Either way, growers such as JetBlue, Southwest, and Virgin America are likely to outperform.

5 stocks, none like the others
Or at least that's what the odds might say. Trouble is, by itself, revenue growth isn't always the most telling metric. To understand which of these carriers is most likely to see its stock take off over the next five years, we need to take a closer look at their key operating metrics:

  1. Lufthansa. Thinning its fleet at a time when smaller U.S. carriers are expanding. According to data compiled by S&P Capital IQ, the German carrier flew 615 planes in 2014 -- down from 622 the year prior. Available seat miles climbed 2.1% over the same period but a meager 30 basis point gain in load factor kept a lid on revenue growth. Lufthansa is also dealing with fallout from the March crash of a Germanwings flight en route from Barcelona to Dusseldorf. (Germanwings is a regional airline operating under the Lufthansa banner.) Verdict = avoid.
  2. JetBlue. Focused on growing its presence in its six focus cities while maintaining profit margins, which is no easy feat. Both available seat miles (up 5.1%) and load factor (up to 84%) rose last year. Continued growth seems likely with JetBlue adding a slew of roomier A321 jets to its fleet, boosting capacity for high-traffic routes. Verdict = watch, and perhaps buy.
  3. Southwest. Brand loyalty and expansion position America's best-known discount carrier well for the future, but growth isn't coming easy. Available seat miles inched up just 0.5% last year after a 1.7% gain the year prior, a 6.3% jump in 2012, and a massive 22.5% boost in 2011 as a result of acquisition of AirTran. Look for planned expansion across 50 new international routes to supply growth while the forthcoming 737 MAX allows for more efficient handling of long haul flights. Verdict = watch.
  4. Copa Holdings. Parent company of Copa Airlines and AeroRepublica has a staggeringly low breakeven load factor (63.5%) and continues to increase available seat miles (up 9.5% in 2014). Ample cash flow and a balance sheet that includes $601 million in cash and investments versus $1.15 billion in debt gives the company leverage to act opportunistically. Copa may not be growing faster than the industry average right now, but there's every reason to believe it will as expansion continues. Verdict = watch, and perhaps buy.
  5. Virgin America. A strong rapport with customers and expansion opportunities arising from United Continental (NASDAQ:UAL) sharply reducing its presence in the New York area has Virgin America positioned to keep growing faster than the industry average. The bad news? Pressure from low-cost rivals JetBlue (on cross-country routes) and Southwest (in southwestern US markets) could put a lid on gains in the short term. Yet it shouldn't matter; investors aren't taking much risk at current prices. Six months ago, Virgin America stock traded for 10.5 forward earnings. Today, S&P Capital IQ puts that same multiple at just 6.9 -- and that's in spite of an improving growth story. Verdict = watch, and perhaps buy.

If you have to invest in just one airline ...
I'd go with Virgin America. Copa is tempting and may prove to be a better buy later on, but Virgin is a known brand with a management team that's already made good on earlier promises to execute for shareholders. Mix in an attractive earnings multiple and an enticing expansion opportunity, and you've the rare airline stock that looks ready for take-off.