Or, When Being "Overweight" Is A Good Thing

Could the toughest days for the US airline industry behind us? The guys with the money seem to think so.

After five years of consolidation, bankruptcy, layoffs and pension-pinching, Wall Street analysts say they're on the verge of increasing projected earnings for several different US airlines.

Somewhat curiously, however, the Associated Press reports Morgan Stanley analyst William Greene rated low-cost carrier JetBlue as his best airline investment at "Overweight" -- despite the fact the airline just posted its second losing quarter, and its stock is down around 17 percent on the year.

Conversely, the Old Reliable of US airlines -- Southwest -- is rated by Greene as "Underweight", despite several years of consistent profits. Greene justifies his rating JetBlue higher by the carrier's willingness to increase its fares to offset operating losses.

In the middle segment -- or "Equal Weight" -- are the legacy carriers American and Continental. Greene added that the latter is the only 'hub-and-spoke' airline that is increasing passenger capacity, at a time when most other airlines are reducing the number of aircraft they fly in order to fill existing planes to the brim.

Granted, the high cost of fuel is remains a big problem for the industry... and not one that is likely to go away. But if perception is reality... maybe the darkest days really are behind us.

FMI: www.jetblue.com, www.southwest.com, www.aa.com, www.continental.com