What Caused Virgin America To Spike Up Today?

Shares of Virgin America Inc VA spiked up on Wednesday on a report by CNBC's Dominic Chu that airlines expect the busiest spring this year. Joe Terranova discussed why he is buying the stock.

Most Passengers In 7 Years

"Airlines are soaring [and they are] higher on today's trade on expectations of a busy spring season for travel," Chu said. "Airlines for America says that U.S. carriers will carry the most passengers in seven years in March and April and that's thanks mostly to an improving economy."

He continued, "The trade group estimates that a 2 percent bump in passenger loads over the same period last year, that's what we could see. Airlines are increasing the number of seats available by 3 percent to accommodate this demand."

Virgin America

"I think [Virgin America] is an airline that folks have forgotten about," Terranova said. "I don't think it's a $34 airline, I think it's a $40 airline. If you look at the February numbers, which overall for the industry were not that strong, but yet Virgin America traffic was up 3.6 percent, six-tenth in percent in capacity, lower fuel cost remain."

"They have a new route right now from Dallas that I think is going to be very strong and they are a niche player. I just think overall this is an airline that's kind of forgotten about since the IPO. It's got continued tailwinds behind it, not to mention strong U.S. dollar and recovering U.S. economy," Terranova concluded.