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United Airlines and Norwegian Jump on Increasing Travel Optimism

Airline and cruise stocks rise as the recovery from the COVID-19 pandemic has been faster than expected.
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Airline and cruise ship stocks were leading the S&P 500, driven by  optimistic comments from industry executives and an improved outlook from United Airlines  (UAL) .

United was one of the S&P's biggest gainers, rising 4.5% to $58.68, after the carrier said in a regulatory filing that while business travel remains "significantly depressed" it expects to post an adjusted third-quarter profit as overall demand improves.

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United said its expects to have a positive profit margin by June, with an overall second-quarter margin of -11%, around 9 percentage points inside its prior forecast.

United posted a wider-than-expected first-quarter loss last month, but the company said it was "encouraged by the strong evidence of pent-up demand for air travel."

Norwegian Cruise Line Holdings  (NCLH)  was advancing, one day after the cruise ship company said it planned to return to U.S. sailings in August. 

Rival cruise ship operators Carnival  (CCL)  and Royal Caribbean  (RCL)  were also higher. Both companies said last week that they planned to resume U.S. cruises.

Delta Air Lines  (DAL)  President Glen Hauenstein said at the Wolfe Research Transportation and Industrials Conference that the pace of recovery from the COVID-19 pandemic has been faster than expected with each month bringing bookings that are higher than the previous month, according to Bloomberg.

Derek Kerr, American Airlines'  (AAL)  chief financial officer, said "business travel and long-haul international are starting to show encouraging signs.” 

“We’re encouraged by everything we’re seeing," Kerr said.

Southwest Air  (LUV)  CEO Gary Kelly said May-June flights are booked around 85% and that the company is seeing “more normal fare levels," according to Bloomberg.

The travel industry was devastated by the COVID-19 pandemic shutdown due to quarantines and social distancing requirements.