What happened

Shares of JetBlue Airways (NASDAQ:JBLU) were up more than 5% on Thursday afternoon, propelled higher by a bullish 2021 outlook from a rival and some positive analyst comments. The airlines had a difficult year in 2020, but investors are growing more hopeful they'll see a turnaround in 2021.

So what

JetBlue and other airlines were hit hard by the COVID-19 pandemic, which caused travel demand to evaporate. JetBlue shares are down 25% from their pre-pandemic February highs, and JetBlue has warned it expected to burn through about $8 million in cash per day in the recently completed fourth quarter.

A line of JetBlue tails parked at the airport.

Image source: JetBlue Airways.

The question for airline investors is how long it will take for traffic numbers to recover, and Delta Air Lines on Thursday provided a rather upbeat forecast for 2021 that is helping to lift all airlines.

JetBlue shares are also benefiting from a price target boost from Susquehanna, with analyst Christopher Stathoulopoulos writing that while he expects an "uneven path" for airlines trying to reach cash flow positive, vaccine uptake should cause demand for travel to accelerate in the second half of the year.

Stathoulopoulos kept a neutral rating on the shares, but raised his price target to $15.

Now what

JetBlue is on the upswing, but investors should be warned it will take time to rebuild following the pandemic. JetBlue is slowly rebuilding its route map, and has an alliance with American Airlines Group that will come online this year that should help drive revenue, but there is still potential turbulence up ahead.

JetBlue is at its best when it is catering to business travelers and other premium fliers who flock to the company's well-regarded Mint upgraded cabin. With the early parts of a travel recovery likely to be very price-sensitive and focused on vacationers, JetBlue faces the challenge of trying to recover in a travel environment that does not play to its strengths.

JetBlue will survive, but the next few quarters could be choppy. Investors who are along for the ride should keep their seatbelts fastened and prepare for an uneven climb.

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.