Spirit Airlines Stock Skyrockets: Here's Why

The COVID-19 pandemic drove a massive sell-off in airline stocks beginning about three months ago. While investors may have overreacted, they had good reason to be worried about the airline industry. Between early March and mid-April, passenger throughput at TSA checkpoints went from roughly in line with 2019 levels to down a stunning 96% year over year. With traffic evaporating, airlines have been burning cash at a rapid pace since March.

Spirit Airlines (NYSE: SAVE) shares experienced the biggest plunge among major U.S. airline stocks. Between mid-February and mid-May, the stock lost more than 80% of its value, falling from above $40 to a May 15 closing price of $8.01. However, over the past six trading days, Spirit Airlines stock has come roaring back, jumping more than 50% (with about half of that gain coming this Tuesday).