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Dallas-based Southwest said it expects second-quarter revenue to rise 12-15% © AP

Airline stocks rallied as investors were buoyed by optimism surrounding summer travel after U.S. carriers Southwest Airlines and JetBlue Airways raised their second-quarter forecasts.

Shares of Southwest rose 6%, while JetBlue rose 3.4% on Thursday.

The more optimistic outlook helped boost the sector, with shares of American Airlines and United Airlines up 7% and Delta Air Lines up nearly 6%. The broader NYSE Arca Airline Index rose 5.3%.

Dallas-based Southwest said it expected second-quarter revenue to rise 12-15% from the same period in 2019, before the pandemic hit, compared to its previous estimate. from 8 to 12%.

Bookings on JetBlue ‘exceeded business expectations’, the airline said, leading the New York-based carrier to forecast revenue for the current three-month period to be at or above the limit higher than its previous forecast of 11 to 16% compared to the second quarter of 2019.

U.S. Chief Commercial Officer Vasu Raja told a conference on Thursday that the company would wait to see what happens with air travel over the Memorial Day long weekend, which he said would be the ” first real indication of what summer could look like,” but added that the carrier is “encouraged by what we’re seeing.”

Despite the upbeat comments, U.S. carriers continue to struggle with capacity constraints as demand for air travel increases.

Earlier today, Delta cut its summer schedule by 2%, or 100 daily departures, mostly in the United States and Latin America, following similar announcements by rivals earlier this year.

“This will strengthen our system’s resiliency and improve operational reliability for our customers and employees,” the Atlanta-based carrier said in a statement. The cuts will affect the list of flights from July 1 to August 7.

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