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Shares of

Alaska Airlines



America West


bucked Monday's negative trend, thanks to an upgrade from Goldman Sachs.

Before the bell on Monday, analyst Glenn Engel upgraded America West to outperform from in-line and upgraded Alaska Airlines to in-line from underperform, telling investors that with airline revenue improving faster than expected, the more cyclical carriers make good buys. In light of the upgrades, Engel downgraded

Atlantic Coast Airlines





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to in-line from outperform.

The news sent Alaska shares up $1.23, or 4.8%, to $27.15, while America West rose 21 cents, or 2.6%, to $8.42. Atlantic Coast and ExpressJet were both lower, with the former off 26 cents, or 3.2%, to $7.83 and the latter off 99 cents, or 7.2%, to $12.85.

While Goldman's research note boosted Alaska and America West, it was also broadly optimistic about the revenue picture after Labor Day, when travel demand falls as the summer vacation season ends. In short, Engel said that airlines have been disciplined when it comes to capacity and that planes should be packed with passengers, as they were in July.

"Summer revenues have outperformed expectations, and we expect carryover into the winter. With capacity only gradually coming back online and continuation of volume trends, we expect August loads to exceed July levels," he wrote in his note, adding later, "

Comparisons are easy, so September booked loads are shaping up well."

In addition to boosting a pair of ratings, Engel raised third-quarter and fiscal 2003 earnings estimates for eight airlines, reiterating his attractive rating on the sector and telling investors this wouldn't be the last time estimates are revised upward. One possible boost to earnings could be the nascent business travel recovery, which could pick up steam as the economic recovery takes hold.

"Leisure demand boosted summer revenues, but finally business demand

is starting to help boost results," Engel said. "Our leading indicators continue to provide encouragement ... the ISM index is above 50 and increasing year over year, employment data is bottoming out,

and hotel revenue per available room shows business and upscale acceleration."

But investors, who have lifted the Amex Airline Index 111% since March 11, weren't as bullish, with the Amex airlines off 0.3%, led lower by

Northwest Airlines


, down 32 cents, or 3.5%, to $8.78.