What happened

Shares of JetBlue Airways (JBLU -5.12%) fell 9.8% on Monday, after nearly doubling last week. Investors rightly were excited last week that lawmakers in Washington were able to forge a relief package for the struggling airline industry. But even with the bailout complete, the challenge for the airlines is far from over.

So what

JetBlue has been part of the stampede by airlines to cut flights and ground planes in response to the COVID-19 coronavirus pandemic, which has cut demand for air travel and led to concerns about the health of the industry.

The industry received $50 billion in loans and grants as part of the $2 trillion economic stimulus plan, but airline rivals have been clear that the cash infusion might not be enough if the downturn continues. Even if the pandemic is brought under control in the coming weeks, the economic impact is likely to reverberate for months to come and could lead the U.S. into a prolonged recession.

A JetBlue plane on the tarmac on a cloudy day.

Image source: JetBlue Airways.

JetBlue shares lost more than 60% of their value during a 30-day period ending March 23 but rallied nearly 75% off that low last week as the bailout bill progressed through Congress. That rally is now fading as the reality of the situation comes back into focus and investors realize there is no quick fix for what ails the industry.

Now what

JetBlue is well run and has a cash runway to weather the storm for months, but if the downturn is a long one, the company could still end up in some trouble. JetBlue has neither the size and the scale of industry titans like Delta Air Lines or Southwest Airlines, nor the ability to make money at price points as low as what Spirit Airlines or Allegiant Travel can offer.

JetBlue before the pandemic had been trying to build its business around a premium product catered to business travelers. In past recessions, vacationers have come back before businesses, drawn to low fares, so if nothing else, JetBlue seems unlikely to be the first airline stock to take off after COVID-19 is finally in the past.