Airline Outlook Could Take Off In '09

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The outlook for the airline industry is becoming more favorable thanks to the pullback in jet fuel prices and decreased capacity – as weak carriers go out of business, more planes stay on the ground, and mergers such as Northwest-Delta (DAL) reduce the number of companies competing for less demand as business and consumer travel declines in the wake of the global economic slowdown.

The accompanying table includes statistics and the top five rated companies in the ETFI Global Airline Index of 43 companies with market caps over $250M, which posted a 32% loss over the past year as compared to a loss of 21% for the iShares Dow Transports (IYT) and 38% for the S&P 500 SPDR (SPY). The top five rated airlines include small, regional carriers such as Allegiant Travel (ALGT), Hawaiian Airlines (HA), and Alaska Air (ALK) along with two larger Japanese carriers, All Nippon Airways (ALNPY.PK) and Japan Airlines (JALSF.PK).