What happened

Shares of Hawaiian Holdings (NASDAQ:HA) were up 37% in February, according to data provided by S&P Global Market Intelligence, as investors increasingly bought into the so-called "reopening trade." Hawaiian and other airlines were hit hard by the COVID-19 pandemic, and investors have high hopes for the company as conditions begin to normalize.

So what

Hawaiian got hit harder than most airlines. Its niche network is tied to its home state, and when Hawaii imposed a 14-day quarantine on visitors last year, it all but sank demand for flights to the islands.

A Hawaiian plane flies over Diamond Head.

Image source: Hawaiian Holdings.

But that Hawaii focus could be a plus in a recovery. The initial surge in travel demand is expected to be focused on tourism and domestic flights. With vacationers desperate to get out of the house once they've been vaccinated and international options limited, what better time to go to Hawaii?

Hawaiian shares got a boost midmonth from a Deutsche Bank note upgrading the entire airline sector, with analyst Michael Linenberg declaring the airlines are "back on track" following a lost year due to COVID.

Now what

Hawaiian, thanks to a strong January and even better February, is now up more than 50% year to date. The shares are still down from the beginning of 2020 but have made back most of what they lost due to the pandemic.

The outlook for the airlines is definitely improving, but investors need to be careful not to get ahead of the recovery here. Given the attractiveness of Hawaii in this environment, and the lack of international options to fly planes, competitors are likely to put a lot of planes on Hawaiian routes this summer.

Hawaiian prior to the pandemic had been building out its transpacific international route network, in part to help offset domestic competition, but that is not an option right now.

Hawaiian is a well-run airline and a long-term survivor, but I'd be surprised to see the stock experience another few months of surges like those of January and February.

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.