MOST READ: Airline Stocks Could Triple If Oil Settles

CHARLOTTE, N.C. -- A contrarian airline analyst is forecasting that legacy airline shares could double or triple once oil prices stabilize.

Avondale Partners analyst Bob McAdoo, in a report Wednesday, said there was "little chance" airline shares could rise much with crude oil prices fluctuating between $2 and $4 a day.

"Once oil stabilizes, and it becomes clear to the broad group of investors and pundits that the legacy airlines are not all going out of business, we expect a doubling or tripling in airline share prices," he wrote.

In newly revised estimates for the six legacy carriers, based on recent guidance provided for a Merrill Lynch conference, McAdoo is far more optimistic than handful of other analysts who revised estimates in the past week, although he does forecast a loss in every case.

McAdoo puts the full-year 2008 loss at American Airlines parent AMR(AMR Quote - Cramer on AMR - Stock Picks) at $4.88, or 38% below other revised consensus estimates. His estimated 2008 loss for US Airways(LCC Quote - Cramer on LCC - Stock Picks) is $6.83, or 39% below others, and his estimated loss at United Airlines parent UAL(UAUA Quote - Cramer on UAUA - Stock Picks) is $7.48 or 36% below others.

"We readily acknowledge that our estimates are more optimistic than most, but we believe that the analyst community seems to have biases against certain airlines," McAdoo wrote, citing US Airways and United as examples.

He said the chief shortcoming in many analyst estimates is the failure to assume that revenue per available seat mile will increase as capacity comes out of the market, even though this is exactly what happened when US Airways took out 60 airplanes, or about 15% of its capacity, following the 2005 merger.

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