What happened

It's a good day for airline stocks, and after a slower start than many of their peers Hawaiian Holdings (NASDAQ:HA) and Southwest Airlines (NYSE:LUV) have joined the party. Shares of Hawaiian traded up as much as 10%, and Southwest up more than 5%, after a Wall Street analyst signaled the green light to buy into the sector.

So what

Airline investors have endured a difficult last 12 months, with the pandemic wiping out demand for travel. The stocks are off their lows, but still not fully recovered after falling dramatically last spring.

It will likely take a widespread vaccine to get people traveling again. Despite some initial hiccups the vaccine rollout appears to be going pretty well, and airlines and other so-called "reopening trade" stocks were on the upswing on Monday on anticipation that we will soon be returning to normal.

A Southwest plane in flight.

Image source: Southwest Airlines.

Deutsche Bank analyst Michael Linenberg sounded the all clear on Monday, upgrading eight airline stocks, including Hawaiian and Southwest, from hold to buy. Linenberg wrote that trends including COVID-19 cases, hospitalizations, and vaccination rates are all heading in the right direction, and praised the industry's efforts to mitigate the spread of the disease and reassure travelers.

Now what

I agree the worst is behind us, but investors still need to be cautious because the recovery will take a significant amount of time. Southwest came into the crisis with the industry's healthiest balance sheet and has a long history of going on the offensive when times are tough, something the airline appears to already be doing this time around.

But it also faces the potential for difficult negotiations with its labor unions in the months to come if traffic doesn't return quickly.

Hawaiian, meanwhile, is a well-run carrier but one with a niche route network that is likely to come under an onslaught of competition if domestic leisure traffic, as expected, returns ahead of international and business traffic and rivals add flights to try to capture Hawaii-bound vacationers. In normal times Hawaiian leans on its international flying to Asia to offset that competitive pressure, but that's not an option right now.

Both airlines are long-term survivors, but Southwest appears likely to get back to normal ahead of Hawaiian. For those buying in now, be warned it could take some time to get to your destination.

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.