As my favorite crooner, Francis Albert Sinatra, used to sing: Come Fly With Me. Airlines are increasingly targeting consumers with aggressive advertising and special deals to entice them to book vacations. Suffering from cabin fever and armed with stimulus checks, consumers are heeding the call.

Airfares are surging in demand and accordingly in price, boosting the bottom lines of pandemic-battered air carriers. The airline industry is an economic bellwether and its recovery bodes well for the overall economy and stock market.

Airlines Reporting Corp., which compiles consumer-to-airline transactional data, reported on April 15 that accredited travel agencies racked up a total of $2.8 billion in net sales for March 2021, a whopping 82% increase compared to February. Month-over-month comparisons in March showed increases in total passenger trips (+54%); U.S. domestic trips (+50%); and international trips (+66%).

According to the Transportation Security Administration, the seven-day average of passengers screened at U.S. airports has more than doubled since early February, bringing daily passenger throughput by April 7, 2021 to more than 60% of the 2019 average (see chart).

The U.S. is home to the largest air travel market of any single country, with about 926 million passengers transported in the pre-pandemic year of 2019. Because of the lack of ultra-fast rail transport in America, airlines play a vital transportation function for individuals and many industries.

The rebirth of the airlines during this year’s economic recovery suggests that the broader economy that depends on air transport is headed for bluer skies.

Air transportation’s remarkable rebound is part of the economic optimism that has been fueling the post-election stock market rally. That said, red-hot equities paused to cool off Monday. The Dow Jones Industrial Average fell -123.04 points (-0.36%), the S&P 500 slipped -22.21 points (-0.53%), and the tech-heavy NASDAQ declined 137.58 points (-0.98%). In pre-market futures trading Tuesday, stocks were mixed as investors awaited the next batch of earnings reports.

U.S. airlines lost more than $35 billion last year due to the pandemic, but as the economic recovery accelerates, they’re hiring, purchasing new planes, training staff, and opening new routes. The $1.9 trillion coronavirus relief bill passed in March contained billions of dollars in assistance to airlines, including payroll support that forestalled layoffs.

The benchmark U.S. Global Jets ETF (JETS) has gained 16.6% year to date compared to 10.8% for the S&P 500 (as of market close April 19). Airline equities appear to be on the flight path this year for further market-beating appreciation.

Exotic booze, in far Bombay…

A major tailwind for the stock market right now is the reinvigorated consumer, who is coming out of quarantine to start spending again. After being stuck in their homes for months, people are packing their Samsonites to seek far-flung adventure.

Watch This Video: The American Consumer Awakens

Since the beginning of the coronavirus outbreak, Americans have amassed savings worth $2.6 trillion, Moody’s Analytics reported last week. That’s the most excess savings of any country, representing 12% of U.S. gross domestic product. That cash is burning holes in millions of pockets.

At the same time, corporate earnings are on the ascendancy. As of this writing, more S&P 500 companies are exceeding earnings per share (EPS) estimates for the first quarter than average, and beating EPS estimates by a wider margin than average, according to research firm FactSet.

Overall to date, about 9% of S&P 500 companies have reported actual results for Q1 2021. Among these companies, 81% have reported actual EPS above estimates, which is above the five-year average of 74%.

In aggregate, companies are reporting earnings that are 30.3% above estimates, which is far above the five-year average of 6.9%. If 30.3% is the final percentage for the quarter, it will mark the largest earnings surprise percentage reported by the index since FactSet began tracking this metric in 2008 (see chart).

As you can see, the information technology, health care, and materials sectors lead the way. This week, 81 S&P 500 companies, including 10 Dow 30 components, are scheduled to report Q1 results.

So far, the blended year-over-year EPS growth rate for the first quarter is 30.2%. Positive Q1 earnings surprises reported by companies in the financials sector are lifting the earnings performance average. Meanwhile, major airlines have been boosting their earnings guidance for not only Q1 but also for the next three quarters of 2021.

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John Persinos is the editorial director of Investing Daily. You can reach him at: mailbag@investingdaily.com. To subscribe to his video channel, follow this link.