Soaring Fuel Costs Ground Airline Stocks

"Our five-year plan provides a road map to better manage through the down cycles that are inevitable, and create value for all stakeholders, both of which the vast majority of the U.S. airline industry has consistently failed to do," Tilton said, during a third-quarter conference call. "Rather, as those of you on the call know better than most, U.S. airlines have consistently destroyed value."

The few public details of United's plan include improved yield management, a focus on high-end passengers and strategic transactions, including spinoffs of the airline's maintenance division and frequent flier program. Tilton said such moves would relieve United of the burden of "cross subsidies that mask inefficiencies."

Of course, it is unclear whether airlines can find salvation in either Parker's or Tilton's vision. Many observers and some carriers are skeptical of spinoffs that trade long-term revenue for immediate gain.

And while capacity reductions enable carriers to more easily raise fares to compensate for fuel price increases, the downside is that increased fares could scare off passengers. That evidently is what the stock market expects.

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