Signs that air travel is rebounding could lift shares of low-cost carriers focused on the domestic market, notably Southwest Airlines and Spirit Airlines.

Some of the hardest-hit airline stocks were surging, including United Airlines Holdings, up 12%, and Spirit Airlines, up 14.6%.

Airline stocks are rocketing higher on Tuesday morning, joining in a broader market rally as investors celebrate signs economic activity is returning to normal and promising developments in the race for the COVID-19 vaccine. Shares of Spirit Airlines (NYSE: SAVE) led the way, up more than 14% as of 10 a.m. EDT, with shares of Southwest Airlines (NYSE: LUV), United Airlines Holdings (NASDAQ: UAL), Delta Air Lines (NYSE: DAL), American Airlines Group (NASDAQ: AAL), Alaska Air Group (NYSE: ALK), JetBlue Airways (NASDAQ: JBLU), and Hawaiian Holdings (NASDAQ: HA) all up double digits.

Airline shares were under pressure again on Wednesday following comments from Federal Reserve Chairman Jerome Powell forecasting a long post-COVID-19 recovery that could "leave behind lasting damage" to the economy. The airlines need a quick economic rebound to avoid financial distress, and Powell's comments provided new reason for investors to worry about the viability of airline shares. As of 12:30 p.m. EDT, shares of Spirit Airlines (NYSE: SAVE) were down 14%, shares of United Airlines Holdings (NASDAQ: UAL) were off 9.8%, and shares of Delta Air Lines (NYSE: DAL), American Airlines Group (NASDAQ: AAL), and Southwest Airlines (NYSE: LUV) were all down more than 5% apiece.

Boeing is laying off over 6,700 of its U.S. workers, with "several thousand” more layoffs planned. Yahoo Finance’s Emily McCormick and Akiko Fujita discuss.

Spirit Airlines Inc. was downgraded by Raymond James analyst Savanthi Syth, who said that while she believes the discount air carrier is set up well in the current environment, given its low-cost structure, she sees "more compelling risk-reward elsewhere." Syth cut her rating to market perform, after being at outperform since September 2019, and at strong buy before that since at least June 2017. Meanwhile, the stock rose 2.0% in premarket trading, after tumbling 7.3% on Tuesday in the wake of downbeat comments about the industry from Boeing Co. Chief Executive David Calhoun. "We continue to expect a slightly slower earnings recovery at Spirit relative to other domestic peers due to its role as a 'spill' airline and still believe, in contrast to some investors, that Spirit will be able to maintain its cost advantage even if it has to pair back operations," Syth wrote in a note to clients. The stock has tumbled 78.8% over the past three months through Tuesday, while the U.S. Global Jets ETF has tumbled 60.0% and the S&P 500 has lost 14.9%.

Shares of United Airlines Holdings (NASDAQ: UAL) closed down more than 3% on Thursday and were down 12% earlier in the trading session, as the carrier's troubles continue to mount. It was a down day for most of the airlines, but United continues to underperform. It's been a rough week for United shareholders.

Airlines that took bailout funds will now have more flexibility to cancel routes, according to new rules issued by the Transportation Department. The market seems to think it’s too little, too late.

Airlines have been hit hard by the COVID-19 pandemic, sending stocks crashing down and causing Warren Buffett to run for the emergency exits. During a May 12 television interview, CEO David Calhoun said a "major U.S. carrier" will "most likely" go out of business this year, predicting an extended decline in travel.

Q1 2020 Spirit Airlines Inc Earnings Call

Yahoo Finance’s Emily McCormick joins Akiko Fujita to discuss the outlook on air travel as states begin to reopen.

Spirit Air shares were cut to market perform at Raymond James, which sees "more compelling risk-reward elsewhere."

The coronavirus pandemic has made air travel far less appealing, which is pushing airlines to the edge of bankruptcy.

Airline shares were flying higher again on Wednesday, the sector's second straight day of posting double-digit gains on improving optimism that the U.S. economy is in the early stages of a recovery. Shares of Spirit Airlines (NYSE: SAVE) led the way at the open, jumping 18%, while shares of American Airlines Group (NASDAQ: AAL), United Airlines Holdings (NASDAQ: UAL), JetBlue Airways (NASDAQ: JBLU), Alaska Air Group (NYSE: ALK), Hawaiian Holdings (NASDAQ: HA), and Allegiant Travel (NASDAQ: ALGT) were all up double digits.

Shrinking passenger revenues ail the Q1 earnings performance of carriers like JetBlue (JBLU) and Spirit Airlines (SAVE).

Over the past decade, this budget airline's stock price soared from $12 to $85, then sank back below $10. Yet while its near-term outlook is bleak, its long-term potential is substantial.

After losing over 80% of its value in three months, Spirit Airlines stock has surged more than 50% over the past week-and-a-half. However, investors should expect some bumps on the road to an eventual recovery.

What happened We've been saying for weeks now that airlines, thanks in part to a government cash infusion, are in no immediate danger of liquidity issues, but the industry needs traffic to normalize in the months to come to avoid dire consequences.

Investors appear optimistic on budget carriers because their operating models seem more adaptable to travel in a post-Covid world.

The analysts covering Spirit Airlines, Inc. (NYSE:SAVE) delivered a dose of negativity to shareholders today, by...