Airline investors are feeling bullish ing strong results from Delta Air Lines, meaning stocks including JetBlue Airways (JBLU 8. 16%) are enjoying a tailwind. S of JetBlue were up 10% as of 1 p.
ET ing Delta's quarterly results. Image source: JetBlue. Delta ders, others take notice Airlines tend to be cyclical, performing well when times are good and consumers have money to spend on vacations.
S have been under pressure this year due to concerns that higher inflation and tariff-related uncertainty would lead to less demand.
On Thursday, Delta kicked off airline earnings season by beating expectations and reinstating full-year guidance ahead of the consensus estimate.
Investors are betting that if Delta is seeing strong demand, the rest of the industry is too.
Though JetBlue will not report its results for weeks, investors are bidding the s up on anticipation that strong demand will boost earnings. Is JetBlue a buy.
Although airline stocks tend to move together, investors should be aware there are significant differences between Delta and JetBlue.
Delta is part of a "big four" that control 80% of the domestic industry, leaving smaller companies JetBlue scrambling to soak up demand where they can.
JetBlue has been a lot less fitable than Delta in recent quarters and faces a significant debt burden. S of JetBlue are down nearly 40% year to date even with Thursday's rally.
The outlook for the company is at least slightly better today than it was yesterday, but investors should remain cautious around this stock. Lou Whiteman has no position in any of the stocks mentioned.
The Motley Fool recommends Delta Air Lines. The Motley Fool has a disclosure policy.