Continental Cruising

As the resurgent airline industry heads for its first profitable year since 2000, Continental Airlines (CAL Quote) has emerged as the very obvious leader of the pack.

Since the start of the year, Continental's stock has risen nearly 70%. The airline topped analysts' estimates in the second quarter, its best in five years, and again in the third quarter. It has 138 international destinations, the most of any U.S. carrier.

And analysts are effusive in their praise of Continental, termed "the Tiffany of the legacies" in a recent report by Calyon Securities analyst Ray Neidl.

Vivian Lee, an analyst with Alliance Capital, is also enthusiastic, writing in a research note that even though "the rate of growth at Continental has been quite a bit more robust than all of its competitors ... the differentiation will not only become more apparent, but also more accentuated in the next year or two. Put another way, the seeds had to be planted a decade ago to start to come to fruition now."

Alliance Capital held about 9.1 million shares of Continental, or roughly 10% of the total, as of August.

Lee believes that Continental's advantages include a 50-50 split between domestic and international capacity, equal distributions of international capacity between the Atlantic, Pacific and Latin regions, consistent management, a relatively young all-Boeing fleet and a revenue premium over its competitors.