CHICAGO

TheStreet

) -- Once again in November, the airline investing story has been unchanged. Airline operating results appear to be positive, but airline shares got crushed.

"Airline stocks seem too toxic for most investors, and it seems to be getting worse," wrote Wolfe Trahan analyst Hunter Keay, in a recent report. For the year, airline shares are down about 38%, while the

S&P 500

is down 7%. For November, before the opening bell on Monday, airline shares were down about 18%, compared with a 7% S&P decline.

"At very least, we believe the group is due a perhaps sizable stock price bounce, and if we can get clarity that a global economic meltdown isn't in the cards, expect substantial and more enduring gains," wrote Ticonderoga Securities analyst James Higgins, in a recent report.

But while many airline analysts see improved operating conditions that include reduced capacity, higher loads and higher revenue per available seat mile, investors see continued high fuel prices and an uncertain economy.

RASM, a common industry metric, is expected to show gains in November, compared with a year earlier, but of course the benefit of revenue gains can easily be offset by fuel price increases. In fact, fuel prices typically increase more rapidly than revenue because of the industry's traditional difficulty in raising fares.

Airlines will begin to report November traffic results on Friday. "As a result of the declining capacity and stable load factors, we would expect passenger unit revenue growth in the mid- to high-single-digit range," wrote Dahlman Rose analyst Helane Becker, in a report issued Monday. She estimated a November capacity decline of 2%.

Higgins noted that early indications from

United

(UAL) - Get Report

and

Southwest

(LUV) - Get Report

have been encouraging. He said United's load factor is tracking around 82% for the month, which would be about a 100 basis-point gain over a year ago, and estimated the carrier's November RASM gain would climb by at least 13%. While that is positive for the industry, Higgins has neutral ratings on both United and

American

(AMR)

.

Higgins said Southwest provided positive commentary at a recent investor day. He has buys on

Alaska

(ALK) - Get Report

,

Delta

(DAL) - Get Report

,

JetBlue

(JBLU) - Get Report

, Southwest and

US Airways

(LCC)

.

-- Written by Ted Reed in Charlotte, N.C.

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