Top 5 Airline Stock Picks: Analyst

A few airlines could see a doubling of their stock price within the next few years, Wolfe Research Senior Airline Analyst Hunter Keay said Wednesday.

"Well, the multiples are still very low, and they're generating a lot of cash," he said. "And they're growing their earnings through margin expansion, and that margin expansion is facilitated by ongoing capacity discipline, consolidation and a focus on unpopular but very, very profitable fees – ancillary revenue, change fees, bag fees, things like that.

"Most customers are over-entitled in this industry, unfortunately, and that's an ongoing problem."

Several airline stocks have climbed sharply year to date, with such names as Delta 52 percent higher, United Airlines up 42 percent, US Airways seeing a 35 percent increase and Alaska Air Group up 33 percent.

On CNBC's "Fast Money," Keay said that airlines could expect clear skies for the foreseeable future.

"You are looking at more than 2x upside over the next couple of years," he added.

Keay said that his top picks in the space included:

"Those are five names in that order," he added.

Keay attributed a large part of airlines' profitability to extra fees, which he said customers liked when cast as pay-what-you-use fees, something that Southwest Airlines doesn't do.

(Read More: Jim Cramer's Alternative Airline Play for Skeptics)

"That's a huge portion of why we like the other airlines is because they're commercially aggressive, and they're, frankly, not afraid to piss off some of the customers who have been over-entitled over the years," he said.

"Southwest is still very customer-friendly, and that's reflected in their return on invested capital, and I think there's not as much room for that multiple to grow over the years."

(Read More: United 787 Makes Uneventful Return to the Skies)

Trader disclosure: On May 22, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Steve Weiss is long BAC; Steve Weiss is long C; Steve Weiss is long BBRY; Steve Weiss is long F; Steve Weiss is long LCC; Steve Weiss is long UAL; Steve Weiss is long AAMRQ; Mike Murphy is long BAC; Mike Murphy is long INTC; Mike Murphy is long FB; Mike Murphy is long GE ; Mike Murphy is long F; Mike Murphy is long TOL; Mike Murphy is long ADT; Brian Kelly is long TREASURIES ; Brian Kelly is long TLT; Pete Najarian is long AAPL; Pete Najarian is long BAC CALLS ; Pete Najarian is long JPM CALLS; Pete Najarian is long WFC CALLS; Pete Najarian is long MS CALLS; Pete Najarian is long XLF CALLS; Pete Najarian is long INTC; Pete Najarian is long CSCO; Pete Najarian is long BBRY; Pete Najarian is long SBUX; Pete Najarian is long MSFT; Pete Najarian is long F CALLS; Pete Najarian is long PFE; Pete Najarian is long PFE CALLS.