What happened

Earlier this week, discounter Spirit Airlines (SAVE 3.90%) reported a strong first quarter and gave investors reason to believe it would be among the first to fully recover from the pandemic. A rally Thursday was interrupted by a marketwide swoon on talks of possible tax hikes, but the shares jumped more than 5% on Friday morning as more normal investing patterns returned.

So what

Spirit lost $2.48 per share in the first quarter on revenue of $461.3 million, topping analyst consensus estimates for a $2.54-per-share loss on $459 million in sales. We knew going in it would be a rough quarter, but Spirit's quarter looked pretty good relative to others who have reported.

A Spirit jet on the tarmac.

Image source: Spirit Airlines.

Airlines are still trying to dig out from under the mess caused by the pandemic. The whole industry swung to a loss in 2020 as travel demand plummeted, but investors have been optimistic that as vaccine counts rise things will improve as 2021 goes on.

Spirit gave credence to those hopes, saying it expects second-quarter capacity to be down just 5.5% compared to the same quarter in 2019 prior to the pandemic. And the airline is back to growth mode, predicting its total aircraft count will rise to 173 by year-end and to 221 by the end of 2023, compared to 157 at the end of last year.

"We were very pleased to see how well both our domestic and international network performed as demand strengthened in the last few weeks of the quarter," CEO Ted Christie said in a statement. "While acknowledging that the recovery is still in progress and may not be linear, we continue to believe we will be among the first U.S. carriers to reach sustained profitability."

Now what

Last June, when the pandemic and related fears about the future of the airlines was still front of mind, I suggested buying Spirit as a high-risk/high-potential-reward way to bet on an eventual recovery. The thesis at the time, that Spirit catered to the budget-conscious tourists who are likely to be the first to return to flying, has played out, and as Christie notes Spirit now appears likely to be among the first U.S. airlines to normalize.

For long-term minded holders, there is still a lot to like about Spirit. Prior to the pandemic the airline was a fast grower that had a lot of potential to continue that growth well into the future. Arguably airline stocks are not the bargains they were last summer, and the next few months could be turbulent. But Spirit Airlines right now looks like one of the early winners as a recovery takes hold.