What happened

U.S. aviation regulators are forecasting that air travel over the upcoming Memorial Day weekend will match pre-pandemic levels, an indication that the summer travel season will get off to a busy start. Several airlines and related companies are taking off on the news, with shares of Delta Air Lines (DAL -0.54%) and Hawaiian Holdings (HA 1.77%) up more than 6% and 9% and travel software stock Sabre (SABR -1.91%) up 10%.

So what

Airline stocks have enjoyed a nice rebound from pandemic-era lows, but the industry is still trying to hit the heights it enjoyed prior to COVID. Even in the face of economic weakness and uncertainty about a recession, investors are hoping for big things this summer, with pent-up demand for vacation travel continuing through the traditional holiday months.

The Federal Aviation Administration expects the summer travel season to get off to a strong start. The agency is forecasting 313,000 flights over the seven-day Memorial Day holiday period, up 4.5% from a year prior and just below 2019 numbers.

Delta is doing nothing to quell the enthusiasm. The airline expects to fly about 2.8 million passengers over the holiday, up 17% from a year ago.

Hawaiian, with its niche route network, relies on U.S. tourism travel and needs continued domestic strength in the face of sluggish international route reopenings. Sabre, meanwhile, is responsible for the software that powers many of the industry's reservation and scheduling systems. The company tends to do best when airlines are doing well, and should be among the beneficiaries of a strong travel season.

The industry was also likely among the sectors helped by optimism on Wall Street surrounding a resolution to the debt-ceiling talks. Broader markets climbed on talk from both U.S. political parties that a deal is within reach that would prevent the U.S. from defaulting on its obligations.

While the airlines aren't directly affected, the economic chaos a default would likely cause could ripple through consumer confidence and crimp bookings in the months to come.

Now what

The airline industry appears to be on the right path, but investors need to remain aware that the journey is a long one. Even with Wednesday's gains, Delta shares remain more than 40% below where they were at the beginning of 2020, and Sabre and Hawaiian are both off more than 80% from that time.

The good news is that this means that, in theory, the stocks still have a lot more potential upside ahead. But it also reflects a realization by the market that aviation remains a difficult business that tends to underperform in tough economic climates.

For long-term-focused investors, there is great promise for all three of these stocks. But anyone looking to climb on board should keep their seatbelts fastened, and be aware of the potential for turbulence ahead.