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After the airline went through bankruptcy twice, turnaround expert George Putnam now sees improving long-term prospects for US Airways (NYSE: LCC).

In his The Turnaround Letter, the advisor suggests, "When travel does begin to pick up again, US Air with its lean cost structure should profit handsomely." Here's his review.

"US Airways began in 1939 as All-American Airways delivering mail to Western Pennsylvania and the Ohio Valley; from there it grew through acquisitions to be a major national airline.

Airlines Ascend on Relief from High Fuel Costs

A Short Transport ETF Strategy for the Global Slowdown

A disciplined financial system may sound rather mundane to most people, but  at US Air you get the same kind of reliability and flexibility service out of our aircraft using today's fleet work horse, the 737. The Boeing 737 provides the unbeatable cost economies and reliability you need to run a profitable low-fare airline.

Airline Stocks Grounded on False UAL Bankruptcy Rumor

"If there’s one sector that stands to benefit handsomely from a further slide in oil or, at least, a moderation in crude’s rally: the airlines," explains energy sector expert Elliott Gue.

 

In The Energy Strategist, he says, "Airlines may make a terrible long-term investment but can be an outstanding short-term trade." Here he looks at Delta Air Lines (NYSE: DAL) and, for the even more speculatively-inclined, US Airways (NYSE: LCC).

Filed under: Newsletters, US Airways Group (LCC), Oil, Delta Air Lines (DAL), Stocks to Buy

"If there's one sector that stands to benefit handsomely from a further slide in oil or, at least, a moderation in crude's rally: the airlines," explains energy sector expert Elliott Gue.

In The Energy Strategist, he says, "Airlines may make a terrible long-term investment but can be an outstanding short-term trade." Here he looks at Delta Air Lines (NYSE: DAL) and, for the even more speculatively-inclined, US Airways (NYSE: LCC).

Jim Cramer has said it, the Wall Street analysts have said it and some of the most respected money managers have said it: Don't own an airline stock! Apparently people are listening. They are listening so attentively that the airline prices have fallen drastically. Possibly even too drastically.

That's not a very popular train of thought right now with oil prices nearing $150 a barrel. However, with the prices of the airline stocks so low, it is hard for the long term investor not to consider purchasing them.

US Airways Group Inc. ( LCC ): Chairman of the Board and CEO, Director W Douglas Parker Bought 197,000 Shares

The shares of airline operator, US Airways Group, Inc. ( LCC ), hit its 52-week low this week, as oil prices rise around $140s per barrel. LCC shares have lost 83% its value since the beginning of this year. According to analysts, the airline industry overall will cut capacity by 9% in 2008. Delta, Southwest, United Airlines increased their fares by $5 to $40.

Bill Miller increased his holdings by 34% to 5,361,700 shares as of 3/31/08.

Having grown up around aviation (with a father who was an air traffic controller and private pilot), it's always been a fascination. As an investor however, I've typically stayed away from airlines: its just a fundamentally difficult business, to put it mildly. Heavy capital requirements, and typically strangling levels of debt don't mesh well with fuel costs rising at alarming rates. While some, such as Southwest, have a great track record, and seem to really know how to profitably run an airline, that's the exception and not the rule.