ULCC - Mesa Frontier and Allegiant lead big rally in airline stocks

Airline stocks broke higher on Thursday after both Southwest Airlines (LUV +6.7%) and JetBlue Airways (JBLU +4.1%) lifted guidance. Southwest management noted the upward revision is primarily attributable to yield strength, which is more than offsetting the increase in fuel prices - while JetBlue pointed to strong bookings when it set Q2 revenue expectations above its prior guidance range. Earlier in the month, United Airline (UAL +7.4%) also lifted its unit revenue forecast due to strong demand trends. Morgan Stanley thinks the loosening of restrictions across the U.S. and European Union is a bullish indicator for air travel as it will likely drive another wave of pent-up demand being released. Meanwhile, Bank of America pointed to more encouraging weekly bookings data with pricing steadily improved and now standing at +9.1% vs. 2019. International volume trends have also picked up to help legacy carriers. Sector watch: Mesa Air Group (MESA +8.7%),

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Mesa, Frontier and Allegiant lead big rally in airline stocks