Why Airline Stocks Are Taking Off Today

American Airlines Group (NASDAQ: AAL) expects its second quarter to land within the middle of its previous guidance, meaning the higher fuel and labor costs and network disruptions that have made headlines are not expected to weigh on results. The airline sector is flying high as a result, with American shares up as much as 10% and shares of Delta Air Lines (NYSE: DAL), United Airlines Holdings (NASDAQ: UAL), Southwest Airlines (NYSE: LUV), Alaska Air Group (NYSE: ALK), and JetBlue Airways (NASDAQ: JBLU) all up 5% or more.

It is fair to say airline investors are on edge heading into earnings season. The much-hoped-for rebound in vacation travel demand has materialized this summer, but unexpectedly high fuel costs and a shortage of pilots have eaten into growth plans. Recent talk of inflation, and speculation that the Federal Reserve's effort to fight inflation would lead to a recession, has investors wondering what will happen to demand in the months to come.

On Monday, shares of American lost more than 5% based on analysis that it is not as well positioned as some of its rivals to fly through a downturn.

Source Fool.com