Why Southwest Airlines, Spirit Airlines, and United Continental Holdings All Surged This Week

Investors cheer news that it's finally safe to buy airline stocks again.

Rich Smith
Rich Smith
Aug 15, 2015 at 8:13AM

Bad news turned into good news for investors in airline stocks this week.

Last week, a certain legacy flyer -- which we won't embarrass by naming outright (but its name is the mathematical symbol for "change") -- frightened investors quite a bit when it reported a 3% decline in "consolidated passenger unit revenue (PRASM) for the month of July." This raised the worry that expansion of airlines' airplane fleets might be loosening pricing discipline, leading to competition for fliers, and eventually resulting in lower profits for everyone in the industry.

Three airlines came out early this week, however, and largely laid those fears to rest. In quick succession, first United Continental Holdings (NASDAQ:UAL) and Spirit Airlines (NYSE:SAVE) reported July traffic numbers that appear to have allayed investor concerns. One day later, Southwest Airlines (NYSE:LUV) released a report that touched all the bases and encouraged investors even further.

What exactly did the airlines have to say, though? And does it mean what investors seem to think it means? In the short slideshow that follows, we'll tell you all about it. Take a quick look now, and make sure to tune back in at the end for our special free report.

Why southwest airlines, spirit airlines, and united continental holdings all surged from The Motley Fool.