What happened

Seemingly every day there are fresh signs that the airline business is returning to normal. That, plus a new round of stimulus that should both assist the businesses and hopefully create additional demand for travel, has the stocks on the move higher on Friday.

Leading the way is Spirit Airlines (SAVE -7.47%), up as much as 8%, with American Airlines Group (AAL -0.36%) and JetBlue Airways (JBLU 2.79%) each up as much as 6%.

So what

Airlines were among the big losers of 2020, with the pandemic wiping out demand for travel and sending the companies deep into the red. But the U.S. industry survived, in part thanks to billions in government assistance.

With a vaccine rollout proceeding as scheduled, investors are growing more optimistic demand will recover by the summer travel season. Airlines are doing their best to signal they believe it as well. In the last 24 hours, Spirit and JetBlue both announced added flights to sunny tourism-focused destinations, looking to capitalize on an expected summer surge.

A plane soars above the clouds.

Image source: Getty Images.

The airlines are also getting additional support from the government to make sure they are ready for the summer. The $1.9 trillion stimulus bill, signed into law Thursday, includes additional payroll support for the airlines. That means they can afford to keep staff on hand in anticipation of a rebound and avoid the costly retraining process that comes with furloughs.

The stimulus is also expected to put thousands of dollars into the pockets of Americans. If all goes to plan, some of that is likely to go toward airfare.

Now what

The airlines are back, but investors need to be cautious from here.

A full recovery, including traditionally higher-margin business travel and international travel, is likely to take years to materialize. And the stocks arguably have gotten ahead of themselves in recent weeks. Factoring in debt, many of the airlines are actually worth more now than they were in early 2020.

Spirit is the likely near-term winner of this group, with a route network designed to cater to leisure travelers and a cost structure that allows it to profitably undercut most of its rivals. JetBlue does best when travelers are willing to pay up for its well-regarded Mint premium service, but the airline has a brand consumers love and a lot of flights to sunny destinations.

American, meanwhile, has made the most impressive comeback of all the major airlines. But that is in part because it was viewed this time last year as the one most likely to get in trouble as the pandemic worsened. American is a well-run airline with the wherewithal to survive, but of these three companies, it is the one likely to still be digging out from under the pandemic even after others are flying high.