What happened

Delta Air Lines (DAL -0.63%) inked a massive new plane deal indicating the company is still bullish about the future of flight demand, and broader markets are rising on investor hope that the Federal Reserve can avoid a recession. The two news items are giving the entire airline sector a lift, with shares of Delta up as much as 6%, and American Airlines Group (AAL -1.11%), United Airlines Holdings (UAL -1.69%), and JetBlue Airways (JBLU -3.05%) all following close behind.

So what

The biggest industry-specific news item driving airline stocks higher today involves only one airline, but there is a clear read through for the entire industry. Delta announced an order for 100 Boeing airplanes worth upward of $13 billion, a clear indication that the airline remains upbeat on the long-term growth forecast for the industry.

Delta is likely being opportunistic here, as Boeing is eager to move metal. But even when planes are on sale, airlines are reluctant to commit billions if they see too much uncertainty on the horizon. The entire industry was hit hard by the pandemic, and some fear business and international travel might not fully recover until the second half of the decade.

Shares of Delta were hit last week following the airline's release of second-quarter earnings and guidance for the rest of the year. Investors were disappointed to see Delta scaling back capacity.

The new planes will not arrive in Delta's fleet overnight, and the order does little to calm the near-term concerns. But the order is a clear indication Delta is upbeat about its long-term outlook.

Delta is also likely getting a boost thanks to a Citi research note over the weekend that called the market's post-earnings sell-off of the stock overdone. Analyst Stephen Trent notes that Delta shares have fallen back down to mid-2020 levels, a time when airlines were burning through millions daily and COVID-19 vaccines were still months out.

The airline sector is also moving higher along with the broader markets. Investors appear reassured the Federal Reserve isn't hitting the panic button due to inflation, and they seem hopeful that a recession can be avoided. Airlines are sensitive to recession talk because travel is an area consumers and businesses tend to cut back on if times are tough.

Now what

Trent's commentary on Delta can be applied to the broader industry as well. The airlines have issues, and a recovery is still a way off. But things are a lot better now than they were at the start of the pandemic. Delta's new plane order is a clear sign that the industry is planning for the future, and not just scrambling to survive.

American and United are expected to announce second-quarter results this week, giving investors more color about how the industry is forecasting the rest of the year to go. JetBlue, meanwhile, remains engaged in a bidding war for Spirit Airlines (SAVE -3.29%), a clear indication the company is more focused on growth than survival.

For those with a long enough time horizon, there are opportunities in airline stocks today.