The COVID-19 pandemic rages on, but plenty of Americans are getting on airplanes to visit friends and family or travel to leisure destinations. Indeed, during the week that ended on Jan. 3, the TSA screened 7.5 million people: 47% of the total for the same week a year earlier. For comparison, TSA screenings averaged 39% of 2019 levels during Thanksgiving week and just 26% of 2019 levels for the week including July 4.

Clearly, the U.S. air travel market remains early in the recovery process. Still, the rebound in traffic during the holiday travel season suggests there's lots of pent-up demand for leisure travel.

As vaccines tame the pandemic during 2021, airlines will try to tap into this underlying demand. However, some are better positioned than others to profit from a leisure travel recovery. And some airline stocks are pricing in more of a recovery than others. Considering both factors, Alaska Air (NYSE:ALK) and JetBlue Airways (NASDAQ:JBLU) are two particularly attractive airline stocks for investors to consider in 2021.

An Alaska Airlines plane flying over clouds

Image source: Alaska Airlines.

Alaska Air is ready to capitalize on the recovery

Among U.S. airlines, Alaska Air was especially deft in navigating the pandemic. The company benefited from an aggressive effort to pay down debt between 2017 and 2019, which helped it raise affordable debt financing last year. Meanwhile, it quickly reduced cash burn over the spring and summer, limiting the pandemic's impact on its balance sheet.

As a result, Alaska ended the third quarter with a manageable $5.4 billion of debt and lease liabilities, offset by nearly $3.8 billion of cash and investments. As of Dec. 14, the company still had $3.4 billion of cash and investments on hand and ample additional borrowing capacity if needed. And unlike many rivals, Alaska Air didn't resort to a dilutive equity offering during 2020.

Being a low-fare airline, Alaska Airlines is in good position to profit from any revival of leisure travel demand this year. It has already added a host of new leisure-oriented routes in recent months, with more set to launch in the first half of 2021. Meanwhile, the airline is on track to exit the pandemic with lower costs, thanks to moves to shrink its management workforce and a recent decision to accelerate the retirement of its Airbus A320 fleet by buying additional heavily discounted Boeing 737 MAX 9s.

Alaska Air stock has more than doubled since bottoming out last March, but it still sits 27% below its year-end 2019 level. That leaves plenty of upside for this airline stock, especially when you consider the potential for profitability to soar past 2019 levels by 2023, by which point the fleet transition will be nearly complete and demand should have largely recovered.

ALK Chart

Alaska Air stock performance, data by YCharts.

JetBlue could be a recovery winner

During 2020, JetBlue wasn't able to control cash burn as well as Alaska Air. Its business is heavily concentrated in the New York and Boston areas, which were hit hard early in the pandemic and imposed strict travel restrictions thereafter. Fortunately, it also began the year with a strong balance sheet. As a result, JetBlue ended the third quarter with $5.7 billion of debt and lease liabilities, offset by $3 billion of cash and investments. It further strengthened its balance sheet by issuing about $600 million of stock last month.

Like Alaska Airlines, JetBlue has been busy expanding its route map with new leisure routes and new cities. However, JetBlue has a particularly big opportunity ahead, as it plans to launch flights to London this year. Service to additional cities in Europe is likely to begin in 2023.

Nearly two decades ago, JetBlue built itself into a major airline by capitalizing on opportunities that opened up as rivals struggled with the fallout of 9/11 and the subsequent drop in air travel. It could have a similar opportunity in the transatlantic market today.

Finally, JetBlue will also exit the pandemic with a better cost structure than it had previously. Most notably, the carrier just began the process of replacing its least efficient jets with state-of-the-art Airbus A220-300s that will be nearly 30% cheaper to fly on a per-seat basis. It will also likely finish adding 12 seats to each of its A320s within a year or two. Despite its long-term profit growth potential, JetBlue stock has lost a third of its value since last February.

These airline stocks are ready for takeoff

Investors certainly shouldn't expect Alaska and JetBlue to earn big profits in 2021. Depending on the timing of the vaccine rollout and how quickly demand recovers thereafter, they might not be profitable at all this year.

However, both companies have ample liquidity to make it through the rest of the pandemic. And thanks to their cost-cutting moves, they should be able to earn strong profits in the years ahead by tapping into pent-up demand for leisure travel. Neither airline stock is as much of a bargain as it was last spring, but shares of Alaska Air and JetBlue still hold plenty of potential for long-term investors.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.