The airline industry has had a rough earnings season and an overall tough quarter, as the carriers generally reported disappointing numbers following profit warnings earlier in the period.

Most of the airlines escaped the ire of investors on Wednesday and cruised higher by the close of trading. Early in today's session, investors quickly dragged the carriers into negative territory before the sector rebounded by midday.

One of the few bright spots came on Thursday as

Southwest Airlines

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met Wall Street's slightly lowered earnings estimate for the first quarter. Southwest basically weathered the storm and was one of the only major airlines to avoid a major profit warning in the quarter.

The discount airline posted net income of $121 million, or 15 cents a share. Thirteen analysts polled by

Thomson Financial/First Call

had been expecting the company to earn 15 cents, a projection that was lowered from 16 cents last week. Southwest earned $95.6 million, or 12 cents a share, in the year-ago period, before factoring in an accounting change.

"While Southwest is not completely immune to an economic downturn, we are uniquely positioned to do comparatively well as a result of our low-fare philosophy and low cost structure," the company said in a statement, adding that it expects to be "solidly profitable" in the second quarter even if the economy continues to slow.

However, Southwest wasn't typical of the sector, as labor problems and rising fuel costs decimated earnings for some of the airlines.

Yesterday,

Delta Air Lines

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badly missed already lowered earnings estimates for the first quarter and blamed the shortcoming on the slowing economy and pilot labor issues. For the quarter, Delta lost $122 million, or $1.02 a share, excluding unusual items. Analysts were expecting a loss of 85 cents a share. In March, the company

warned that it would miss the consensus estimate and lose between $85 million and $110 million, or 70 cents to 90 cents a share. Wall Street had expected the company to earn 46 cents for the quarter.

And the second quarter doesn't look good, as the company expects continued economic softness and public concern over a possible strike by Delta pilots, which could slice into the top line.

Goldman Sachs

analyst Glenn Engel followed the report with a note on Thursday that slashed the firm's earnings estimate for Delta to 25 cents a share from $1.05 for the second quarter. That's a far cry from the $2.85 the carrier earned in the year-ago period. Engel said labor problems will "intensify" in the second quarter and indicated that the threat of labor troubles will drive customers to competitors.

He also dropped his earnings estimates for 2001 and 2002. Goldman did keep Delta on its U.S. recommended list and said the airline's stock has underperformed while maintaining many "sustainable advantages relative to the sector."

Sharing in the misery was

UAL

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, the parent company of

United Airlines

, which horribly missed the consensus first-quarter estimates with a loss of $305 million, or $5.82 a share. Analysts were expecting the company to lose $4.28 a share, after UAL said in March that it would report numbers

"substantially lower" than the loss of $2.82 a share Wall Street was expecting at the time.

Revenue for the Elk Grove Township, Ill., company dropped to $4.42 billion from $4.55 billion in the year-ago. UAL projected a loss in the second quarter, citing lower revenue and higher labor and fuel costs. Should the company continue to have trouble propping up the top line, UAL could post a loss for the full year.

"The earnings numbers were not unexpected," said Robert Milmore, airline analyst at

Arnhold & S. Bleichroeder

. "Five out of the six that reported (Wednesday) had issued profit warnings." He said it's hard to tell what's in store for the airline industry in the upcoming quarters because a large portion of the business comes from corporate travel, which many companies are cutting back in an effort to trim their costs. "The majority of the profitability comes from the business side and that's where the weakness is," he said. However, he said leisure travel appears to be holding steady.

"We're closer to the bottom than we were three months ago, but we can go lower in terms of business travel" Milmore said. "It's a tough call."

Northwest Airlines

(NWAC)

posted a first-quarter loss that was narrower than Wall Street's dramatically lowered estimate for the period, but still came to $123 million, or $1.47 a share, excluding nonrecurring items. Analysts were anticipating a loss of $1.64. In March, the airline

warned that its loss would be wider than the consensus estimate of 59 cents a share. The company projected a loss of $1.55 to $1.80 a share, compared with a loss of 51 cents in the year-ago period.

US Airways Group

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reported a loss of $171 million, or $2.55 a share, while the Street was looking for a loss of $1.77. The carrier lost $1.72 in the same quarter a year ago. US Air had also already warned. Still, the company said operating revenue was up 6.8% to $2.2 billion.

AMR

(AMR)

, the parent company of

American Airlines

, reported a first quarter loss of $43 million, or a 28 cents a share, down sharply from earnings of $89 million, or 57 cents a share, in the first quarter of 2000. Analysts, on average, were expecting the company to lose 31 cents in the quarter. Operating revenue was $4.8 billion.