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As airlines, led by Delta (DAL) - Get Free Report , prepare to report first-quarter earnings, Wall Street's expectations aren't high.

That's not because airlines aren't profitable: Deutsche Bank analyst Mike Linenberg estimated the airline industry will post a pretax first-quarter profit of $4.8 billion, up from last year's record $3.6 billion.

Rather, analysts and investors have maintained their focus on passenger revenue per available seat mile, which continues to decline primarily because fares have fallen due to low fuel prices. "M&A was a nice distraction, but {it's} still all about PRASM," was the headline on a report issued Tuesday by Cowen & Co. analyst Helane Becker.

Economic concerns and trans-Atlantic travel fears spawned by European terrorism have served to underscore worries that airlines won't be able to reverse the continuing PRASM declines.

American, Delta and United have all reported March and first-quarter PRASM at the low end of their guidance and generally weaker than analyst expectations. On April 4, Delta said March PRASM declined 5% due to "headwinds from foreign exchange and a $5 million impact from the recent events in Brussels." First-quarter PRASM was down 4.5%. However, Delta said "demand with forward bookings is tracking ahead of last year."

Delta will report earnings on Thursday; most other carriers will report next week. Analysts surveyed by Thomson Reuters expect Delta will earn $1.29 a share, up from 45 cents in the same quarter a year earlier.

"AAL, DAL & UAL's weak Q1 PRASM results support concerns that the pricing environment remains soft," wrote Credit Suisse analyst Julie Yates in a report issued Tuesday. "That said, expectations were muted even before recent misses."

On the plus side, Yates said, "With easier comps and a decline in capacity growth relative to Q1, we still believe that Q1 should mark the trough and look for 100 to 150 basis points of improvement at the mid-point in Q2 PRASM guides. The pace of improvement the remainder of 2016 however is likely slower than we expected entering the year."

Yates said she expects that following first-quarter earnings calls, consensus estimates for the overall industry will decline, a result of "higher fuel, incremental pricing weakness, and labor cost pressures for certain carriers such as UAL where recent deals have been signed." She also fears continued capacity expansions, particularly in the trans-Atlantic.

While the overall mood is glum, some analysts see reason for optimism.

Stephens Inc. analyst Jack Atkins has an overweight rating and a $65 price target for Delta. (Shares closed Tuesday at $46.63, down 8% year to date). In a recent report, he called Delta "a high quality company, trading like a junk bond, {with} exceptional performance history and strong balance sheet."

Atkins estimated first-quarter earnings of $9.3 billion or $1.32 a share. His $65 price target is based on 8.8X his full-year 2017 estimate of $7.25. Analysts surveyed by Thomson Reuters estimate $7.14.

Additionally, Wolfe Research analyst Hunter Keay expects PRASM improvement at Delta. "For the first time in a while we actually expect an improvement in y/y PRASM growth in 2Q, entirely on capacity deceleration and not higher fares," Keay wrote in a note on April 8. He projected capacity growth of 4.5% in the current quarter, down from 6.3% in the first quarter.

As Delta reports on Thursday, Becker said, "All eyes will be on pricing / unit revenue comments as the market expects to see sequential improvement in unit revenue due to favorable comps."

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.