Airline shares, which have mostly lagged behind the broader stock market recently, are set to face their next major hurdle in the coming days. Southwest Airlines, American Airlines and Alaska Air are all scheduled to report quarterly results this week.
Investors will also try to gauge how much airlines will get hit by flight cancellations caused by the grounding of Boeing Co.'s 737 MAX jetliners. Dow heavyweight Boeing, whose shares have stabilized since a March selloff, reports earnings Wednesday.
Even if earnings help fuel a rebound in airline stocks, many of them will remain underperformers within the transportation industry. Shares of rental-car and truck companies, as well as railroads, have raced past airlines this year.
But with airline stocks looking relatively cheap, analysts say there is a chance that upside surprises throughout earnings season could spur fresh buying. A number of airlines carry price/earnings ratios that are well below that of the S&P 500.
By Akane Otani And Tristan Wyatt