Most readers of this blog already have a healthy skepticism of the opinions of stock analysts. But for those who don’t, please read this NY Times article on several bullish analyst opinions on that black hole of financial loss, the airline industry.
It takes a fairly fertile imagination to reconcile the following excerpt from the Times article with these recent items (here and here) on the airline industry:

[D]eep losses at Delta Air Lines do not deter Jamie Baker, an airline analyst at J. P. Morgan. He maintained an overweight rating even after Delta’s shares were pummeled last week on a fresh warning from its chief executive, Gerald Grinstein, that the airline’s cost-cutting plan was not enough to offset the impact of brutal competition. Delta lost $388 million during the second quarter, and has lost nearly $10 billion this decade.
Without building cash, and without the passage of pension reform legislation now in Congress, Delta was virtually assured of a bankruptcy filing, Mr. Baker conceded in a research note.
Nevertheless, he wrote, “Our call remains that Delta will manage to pull some liquidity strings, make one last and perhaps final run at avoiding Chapter 11, and successfully limp into 2006 while hoping for lower oil prices and improved revenue trends.”

Despite such speculation, stick with Warren Buffet’s analysis of the airline industry. After a particularly unfulfilling investment experience in airline stocks several years ago, Mr. Buffett undertook a study of the airline industry. Taking into consideration the airline industry’s cumulative finances since the day the Wright Brothers took off at Kitty Hawk in 1903, Mr. Buffet concluded that the industry has been, on the whole, utterly unprofitable. In hindsight, Mr. Buffett wryly observed that shooting down the Wright Brothers on that beach would have been a reasonable financial, if not moral, move.
Key tip on airline stocks — wait for Professor Ribstein’s proposed solution to occur before taking a flyer on any airline stock other than Southwest.