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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.

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) - Get Report.

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) - Get Report was advancing, one day after the cruise ship company said it planned to return to U.S. sailings in August. 

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

Delta Air Lines  (DAL) - Get Report 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) - Get Report 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) - Get Report 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.