NEW YORK ( TheStreet) -- The International Air Transport Association (IATA), in its recent report, said that despite rising fuel costs, the demand for air travel has been increasing in the past few months.

For 2011, IATA has cut its global industry profit outlook to $8.6 billion from the December 2010 estimate of $9.1 billion, prompted by higher fuel costs and the Middle East unrest. However, for 2010, the IATA has raised its profit estimate to $16 billion from the prior forecast of $15.1 billion. Currently, fuel accounts for 29% of the industry's operating costs as against 26% in 2010.

The airline industry in the Asia-Pacific region is experiencing robust growth, characterized by lenient regulations, emergence of low-cost carriers, and a booming economy, led by offshoring of services and manufacturing industries. The Asia-Pacific region accounts for almost 16.9% of aircraft in the world and 21% of the global aircraft-leasing portfolio. Meanwhile, as per Frost & Sullivan estimates, growing at a compound annual growth rate of 5.8%, the total number of aircraft owned by global leasing firms is expected to increase from 6,180 aircraft in 2009 to reach 8,646 aircraft in 2015.

Based on analysts' consensus estimates polled by Bloomberg, these six stocks from the airline industry have upsides ranging from 12% to 39% over the next 12 months, with strong buy and hold ratings. These airline companies have strong company fundamentals that will support future growth.

6. Alaska Air Group ( ALK), operating through its subsidiaries Alaska Airlines, Inc. (Alaska) and Horizon Air Industries, Inc. (Horizon), flies more than 22 million passengers annually to more than 90 destinations. Besides, the airline company also provides freight and mail services, primarily to and within the state of Alaska and on the West Coast.

Of the 16 analysts covering the stock, 69% recommend a buy while 25% rate a hold. Analysts polled by Bloomberg foresee the stock gaining an average 12% to $72.2 in the upcoming 12 months.

For the first quarter of 2011, the company reported net income of $29.5 million or 80 cents per diluted share, compared to $13.1 million or 36 cents per diluted share in the first quarter of 2010. Meanwhile, revenue was up 16% to $965.2 million for the same period. Additionally, during the first quarter, the company remained well hedged against increasing oil prices as indicated by savings of $12.5 million. The company reported a record 11.3% in its trailing 12-month return on invested capital, compared to 5.3% in the year-ago quarter.

Looking ahead, the company estimates full year 2011 available seat miles (ASM) to increase by 8%-9% with quarterly increases of 9%, 6% and 7% in the second, third and fourth quarters, respectively. Besides, in 2011, the company's major growth plan is flights to Hawaii from the U.S. West Coast, amid high competition. ALK also has marketing tie-ups with other airlines.

5. TAM ( TAM) is a Brazil-based airline providing air services in the domestic and international markets through its three operating subsidiaries. TAM not only operates scheduled passenger and cargo services to 42 cities, it also serves an additional 40 domestic destinations through regional alliances and directly serves 18 international destinations.

Of the 10 analysts covering the stock, 70% recommend a buy whereas the remaining rate a hold. There are no sell ratings on the stock. Analysts polled by Bloomberg expect the stock to gain an average 29.4% to $27.1 in the upcoming 12 months.

The company placed a $3.2 billion order for 34 aircraft in March 2011, based on near-term bright prospects like strong internal economic growth, anticipated boom in international leisure travel with Brazil hosting the 2014 FIFA World Cup and the 2016 Olympic Games. Besides, the airline has unveiled plans to invest $300 million to increase the frequencies of international flights from Rio de Janeiro. It will receive two Airbus A330 aircraft to expand flights between Tom Jobim/Galeao and the cities of Frankfurt, New York and London.

TAM will be paying $250 million in two installments to acquire a 31% stake in a small Brazilian airline, TRIP Linhas Areas. TRIP accounted for annual revenue of $454 million in 2010 with a market share of 2.71%. Moreover, the Chilean antitrust court is reviewing the proposed merger between LAN Airlines and TAM.

For 2011, the company pegs domestic demand growth at 15% to 18%. The airline will optimize its costs by deploying its aircraft in the domestic market astutely--growing supply from 10% to 14% and by 10% in the international market. It foresees load factors in 2011 in the range of 67.5% to 70% in the domestic market, and at 83% on its international routes. Also, through its cost reduction efforts in 2011, TAM expects to reduce its costs per available seat kilometer (CASK), excluding fuel costs, by 5%.

4. JetBlue Airways ( JBLU), a passenger airline, operates on point-to-point routes with its fleet of 115 Airbus A320 aircraft and 45 Embraer 190 aircraft. As of Dec. 31, 2010, the airline served 63 destinations in 21 states of the U.S., Puerto Rico, and 11 countries in the Caribbean and Latin America.

Of the 18 analysts covering the stock, 33% recommend a buy, while 61% rate a hold. Analysts polled by Bloomberg expect the stock to gain an average 36% to $7.6 in the upcoming 12 months.

For the first quarter of 2011, JetBlue reported net income of $3 million as compared to a $1 million net loss recorded in the year-ago quarter. Despite an additional $91 million in fuel costs, the company managed to swing to profit levels. Leveraging on the strong performance of the Boston and Caribbean networks, JBLU's operating revenues soared 16.3% year-over-year to $1.01 billion. For the same period, revenue passenger miles, yield per passenger mile, and load factor grew 7%, 7.7%, and 460 basis points, respectively.

Heading into the second quarter of 2011, the company estimates ASMs to expand by 7% to 9%, and CASM to increase by 18% to 20%. Meanwhile, for full year 2011, the airline forecasts ASMs to increase between 6% and 8% as compared to the previous year, and projects CASM to rise by 15%. Furthermore, with a strong balance sheet, cash position, and ability to sustain high fuel costs, the company's performance in the next few quarters is expected upbeat.

3. Gol Linhas Aereas Inteligentes ( GOL) is a low-cost, low-fare airline providing services on routes connecting all Brazilian cities and from Brazil to cities in South America and select tourist destinations in the Caribbean. GOL is a holding company that directly or indirectly owns shares of five subsidiaries and four offshore finance subsidiaries. Gol is scheduled to release its first quarter 2011 earnings on May 10, 2011.

Of the 13 analysts covering the stock, 69% recommend a buy while the remaining rate a hold. There are no sell ratings on the stock. Analysts polled by Bloomberg expect the stock to gain an average 38% to $19.4 in the upcoming 12 months.

For March 2011, the airline recorded 19.6% demand growth on its route network. Furthermore, load factor for the same month stood at 70.1% as compared to 64.3% in the year-ago month. For the same period, domestic demand rose 17.7%, while international demand surged 40.2%. The company confirmed that supply escalated 9.7% year-over-year during March.

During its latest annual general meeting, the company deliberated dividend distribution of $32.5 million for full year 2010. For the first quarter of 2011, analysts polled by Bloomberg forecast net income of $103.02 million or 38 cents per share as compared to $13.29 million or 5 cents per share in the year ago quarter. Meanwhile, sales for the quarter is seen increasing 21% to $1.2 billion from $960.7 million in the year ago quarter.

2. China Eastern Airlines ( CEA), an airline operating in China, engages in the provision of domestic, regional and international passenger services. The company operates from Shanghai's Hongqiao International Airport and Pudong International Airport, while its cargo and mail routes are major international hubs. In early 2010, CEA completed the acquisition of Shanghai Airlines.

Of the two analysts covering the stock, 50% rated a buy while the remaining advised a hold. There are no sell ratings on the stock. Analysts polled by Bloomberg expect the stock to gain an average 38.1% to $31.4 in the upcoming 12 months.

For the first quarter of 2011, CEA's passenger throughput increased 16% year-over-year to 24.01 billion person-times. Meanwhile, during March 2011, passenger numbers increased 6.8% year-over-year to 5.5 million, while passenger load factor for the same month was up 0.3 percentage points to 77.6%.

Looking ahead into 2011, the company expects to reap the benefit of robust domestic demand, fuelled by China's strong economic growth. CEA estimates 71 million passengers in 2011 as compared to 64.9 million in 2010, while cargo volume is expected to touch 1.6 million tonnes from 1.5 million tonnes in the prior year. Besides, boosting its share in the global market, the airline has decided to join SkyTeam -- the global airline alliance -- in June 2011. In addition, the carrier plans to expand its cargo and passenger fleet to 561 aircraft by 2015 through a double-digit growth rate over the next five years.

1. Southwest Airlines ( LUV), a passenger airline, provides services in the U.S. The company engages in providing point-to-point service, rather than hub-and-spoke. As of Dec. 31, 2010, the airline served 460 non-stop city pairs with 73% of customers flying non-stop.

The stock received 65% buy ratings from analysts, while the remaining rated it a hold. There are no sell ratings on the stock. Analysts polled by Bloomberg expect the stock to gain an average 39.1% to $16.4 in the upcoming 12 months.

For the first quarter of 2011, the company's revenue grew 18% to $3.1 billion. Total traffic for March increased 9.8% year-over-year with passenger revenue per available seat mile rising 8% to 9%. Meanwhile, as it foresees lower revenue trends for April, the company expects strong bookings for May.

Based on the company's bookings and revenue trends, unit revenue improvement for the second quarter of 2011 is anticipated solid. Furthermore, the company intends to close its acquisition of AirTran Airlines on May 2, 2011. The merger will serve more than 100 destinations, including four new airports the carrier seeks to add in 2011. Southwest plans to expand its capacity by 6% in 2011 from the earlier year levels.

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