Updated from 10:57 a.m. EST

Shares of

Delta

(DAL) - Get Report

,

America West

(AWA)

and

Southwest Airlines

(LUV) - Get Report

got a lift Wednesday from a Wall Street analyst's upgrades.

Delta jumped 40 cents, or 6.1%, to $6.95, after UBS analyst Robert Ashcroft raised his rating on the stock to buy from reduce on the carrier's recent ability to step back from the brink of an imminent bankruptcy filing. (UBS does and seeks to do business with companies covered in its research notes.)

The nation's third-largest airline has won concessions worth $1 billion a year from pilots, secured a total of $1 billion in new financing from

American Express

(AXP) - Get Report

and

General Electric

(GE) - Get Report

and succeeded in exchanging short-term debt.

"With a new pilot contract ratified, Delta now seems unlikely to go bankrupt in the near future," Ashcroft wrote in a research note explaining his ratings changes. "While we always expected Delta pilots to do their part, where we erred was the willingness of GE Capital and (especially) American Express to provide more capital to Delta."

Nevertheless, the airline is not out of the woods, according to the analyst. "As hard as Delta management worked this autumn to stave off Chapter 11, it must work harder still this winter/spring to successfully restructure the company in the breathing space it has won."

America West gained 38 cents, or 6.9%, to $5.87, on Ashcroft's upgrade to buy from neutral. The analyst views the stock as undervalued at recent levels. His 12-month price target is $9.50, based on a multiple of 8.5 times estimated 2007 earnings of $1.35 a share, discounted one year. "The risk is that America West actually tries to buy the remains of ATA," he wrote. "We rely on management to act rationally and avoid this. ... In our view, the last thing AWA needs is the challenge of integrating ATA employees into its workforce and the additional capacity (as well as a new fleet type) of ATA aircraft."

America West has said it was thinking of bidding on assets of

ATA Holdings

(ATAHQ.PK)

, which last month sought Chapter 11 bankruptcy protection. ATA has agreed to essentially sell 14 gates at Chicago's Midway airport to

AirTran Holdings

(AAI)

in exchange for $90 million, but the bankruptcy court will allow other potential suitors to submit bids.

Ashcroft said prospects for increased growth at Southwest in the next few years had caused him to lift the stock to buy from neutral. "We expect greater than Southwest's generic 10% growth over the next couple of years as it finally gets a chance to take advantage of the downturn," the analyst wrote.

Southwest aggressively hedged a majority of its fuel needs before oil prices skyrocketed this year, thus insulating itself from the losses that have hit most other airlines.

The low-cost carrier's stock was up 35 cents, or 2.2%, at $15.94.

Ashcroft had more than upgrades on his mind Wednesday. Shares of AirTran and

Alaska Airlines

(ALK) - Get Report

slid after he downgraded them.

AirTran was off 8 cents, or 0.6%, to $12.21, while Alaska lost 40 cents, or 1.4%, to $29.03.

The analyst lowered AirTran to reduce from neutral, citing valuation and "the fact that we're less sure than the market about AirTran's chances of completing its bid for ATA's Chicago business and the benefit from getting it." His new 12-month price target for the airline is $10.50 and accounts for his expectation that oil prices will be higher next year than he previously forecast.

Ashcroft attributed his downgrade on Alaska Airlines to reduce from neutral on valuation concerns and noted the airline also has some of the industry's highest pilot pay. He lowered his price target on the stock to $23.00 from $25.50 to account for revised earnings estimates resulting from his changed oil forecast.