What happened

Shares of U.S. commercial airlines soared in initial trading Friday morning -- with United Airlines Holdings (NASDAQ:UAL) briefly up 44% and the rest of the carriers all up double digits -- before giving up much of those gains as the day went on.

The industry, and its investors, are currently focused on a proposed government assistance plan designed to get them through the COVID-19 coronavirus pandemic travel slowdown. Expect the stocks to trade up and down based on the prospects of a bailout.

Shares of Spirit Airlines (NYSE:SAVE) opened up 34%, while Delta Air Lines (NYSE:DAL), American Airlines Group (NASDAQ:AAL), JetBlue Airways (NASDAQ:JBLU), Hawaiian Holdings (NASDAQ:HA), Alaska Air Group (NYSE:ALK) all opened up 15% or more, and Southwest Airlines (NYSE:LUV) was up 10% early.

Only United was still up double digits as of 3 p.m. EDT, trading up 12%, and a few of the airline stocks have turned negative.

So what

The airlines have been severely disrupted by the pandemic, with the global industry expected to lose more than $100 billion in revenue in 2020 due to travel bans and plummeting demand. The airlines have responded by cutting flights, raising new capital, and freezing hiring, but industry advocates have warned more could be needed to avoid a global round of bankruptcies.

The U.S. airlines have requested about $50 billion in assistance in the form of loan guarantees and direct grants, but that request has hit pushback from labor leaders who advocate direct assistance for workers and critics who note the airlines in recent years have used substantial amounts of free cash to do share buybacks.

A busy airport with planes parked at the terminal.

Image source: Getty Images.

White House administration officials remain adamant something will be done for the airlines, but the process has taken much longer than expected and has led to continued pressure on airline shares. Early Friday morning optimism about Washington getting something done today has faded as the day has gone on.

United has some extra wind at its back today after Apollo Global Management reportedly bought a portion of the $2 billion one-year loan the airline closed last week. Investors are reading it as a sign a well-respected investor believes the airline can survive without a trip to bankruptcy.

Now what

It's worth noting that the airlines do have billions in unencumbered assets to be used as collateral for loans, and most of the industry's top names have had success raising additional capital in recent weeks. There is a cash runway for most of these companies, perhaps as long as 90 days for some airlines, but at some point, not even the healthiest of companies can survive the status quo.

For the time being, the market is focused on the bailout. I personally think the government has to do it, despite the misgivings. But until we know for sure what is going to happen, it will be hard for this sector to gain altitude.