What happened

Airline stocks have enjoyed two solid days of gains on growing optimism that the worst is over for the travel sector. That optimism is also extending to companies that do business with airlines, as investors are hopeful that revenue will not be under pressure for as long as originally feared.

Shares of Sabre (NASDAQ:SABR) were up 14.8% at the close Friday, while shares of Howmet Aerospace (NYSE:HWM) and Allegheny Technologies (NYSE:ATI) were each up more than 9%.

So what

Sabre, Howmet, and Allegheny do not overlap much, but they all count on airlines for a significant portion of their sales.

Sabre, a former American Airlines Group subsidiary, runs ticketing and reservation systems for airlines. Howmet is the aerospace parts business formerly part of Arconic and once a part of Alcoa. Allegheny is a specialty metal producer that makes titanium used in aerospace applications.

An airport security screener station.

It's now a lot busier than this at airport security checkpoints. Image source: Getty Images.

All three of these stocks were down more than 65% year to date at one point on concerns that the COVID-19 pandemic was doing serious damage to the airline industry. Travel demand cratered as a result of the pandemic, causing airlines to ground planes and cut costs. That means less business for Sabre, and less demand for spare parts and new equipment.

Sentiment has begun to turn in the airlines' favor in recent weeks, and the last few days we have seen airline stocks soar on data points that suggest travel bottomed out in April and is now on the rebound. Airport security screeners had their busiest day since March 22 on Thursday, screening 391,882 travelers. And American Airlines said it flew an average of 110,330 passengers per day in the last week of May, up significantly from the 32,154 a day it flew in April.

If airlines are improving, the outlook for companies like Sabre, Howmet, and Allegheny is, too. The stocks on Friday moved as a result.

Now what

We're headed in the right direction, but we still have a long way to go. Though airport traffic is increasing, the 391,882 people screened at security lines on Thursday represent an 85% decrease over June 4, 2019.

Boeing still expects air traffic to take years to return to pre-pandemic levels, and I think that forecast is likely correct. The airlines are facing a slow climb over the next few years, and that is going to ripple through to companies that serve the airlines as well.

Even after the rally, these stocks are still down between 41% and 54% year to date. Momentum, for now, is on their side, but investors should be warned we are unlikely to go straight up from here.