ATLANTA ( TheStreet) -- Analysts are applauding Delta's ( DAL - Get Report) move to fashion a new model of an airline that can compete for investor dollars.

The carrier said Wednesday it will restore its dividend, repurchase shares, continue to reduce debt and carefully manage capital expenditures, prompting JP Morgan analyst Jamie Baker to write in a report Wednesday that "any deployment of cash that benefits stakeholders and leaves less for manufacturers and pilots to pursue must be viewed positively."

Delta shares gained 3% from Tuesday's close, closing Wednesday at $18.66. For the full year, Delta shares are up 54%, while the Arca Airline Index ( XAL) is up 28%. Analysts cheered Delta's commitment in a series of reports issued late Wednesday and early Thursday.

"We view the capital return plan as further evidence of Delta's leadership among legacies," wrote Imperial Capital analyst Bob McAdoo. "We believe Delta will be successful in appealing to a broader group of investors as it solidifies its track record of producing mid to high single digit pre-tax margins." McAdoo raised his target price to $23 from $20, saying "the company's meaningful dividend merits a premium valuation among its peers."

Baker called Delta's strategy a "Southwestification" of Delta's shareholder base, saying that it presages a change from an ownership model that has 25% of Delta equity owned by hedge funds, five times the hedge fund ownership of both Southwest ( LUV - Get Report) and the Dow Jones Transportation Index.

It is likely that more institutions would buy shares in an airline that offers "double-digit annual operating margins, respectable ROIC, quarterly profitability, a strong balance sheet, healthy buyback activity and a dividend to boot," said Baker, who noted that qualities "were traditional hallmarks of the Southwest investment thesis, but looking forward, we see Delta increasingly offering many of the very attributes Southwest once monopolized."

Other airlines will likely follow Delta's lead. "The announcement sends a very clear message that Delta (and its brethren competitors) are serious about transforming the U.S. airline industry into the investable sector it once was decades ago," said Deutsche Bank's Michael Linenberg, who has a $20 price target.

In particular, US Airways ( LCC) CEO Doug Parker has spoken frequently of restoring the airline industry's investment viability, and it is likely that over time he will take the opportunity to do so as CEO of the new American ( AAMRQ.PK), which will be the world's biggest airline.

-- Written by Ted Reed in Charlotte, N.C.

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