In any tight industry grouping, stocks can benefit handsomely when one of their own does well.
That was the dynamic at play on Wednesday, when both JetBlue Airways (JBLU 13.30%) and United Airlines Holdings (UAL 1.25%) rose at market-beating rates. The former's share price increased by over 4%, while the latter's enjoyed a nearly 6% gain. This was due in no small part to a rival's encouraging quarterly results.
That rival is industry veteran Delta Air Lines, which reported its first-quarter earnings on Wednesday. Yes, the company reported a loss but it was narrower than expected by analysts, while revenue was significantly higher.
JetBlue and United are, of course, not Delta, and their first-quarter results have yet to be published. But no matter their differences, U.S. airlines offer similar services and share many of the same routes. As such, they are subject to the same dynamics and their fortunes frequently move in tandem.
Just now, dynamics are on their side. Consumers who were shut in during the worst months of the coronavirus pandemic are still hungering to get out of their houses and emerge into the world. Meanwhile, a recent spike in oil prices (for obvious reasons, a key cost item for airlines) has receded somewhat, providing carriers with more room to make a buck.
Of the two, if I were a bullish investor interested in airline stocks I'd probably opt for United. JetBlue is an effective carrier in the budget category, but there are numerous questions about the company's future given its recent bid for yet another peer, Spirit Airlines. JetBlue also recently announced a set of cancellations due to its overly optimistic view of summer air travel demand.