"Airlines show 23% average upside potential on an aggressively conservative approach to modeling fuel benefits. Our upside case, which assumes fuel stays low through 2016 with much more limited revenue offset, shows about 65% upside to coverage," analysts said.
"Fundamentally, the U.S. airlines stand to see about $10 billion decline in fuel costs in our 2015 outlook. We can debate how much will flow fully to earnings, but the potential remains substantial put against our $14.5 billion pre-tax earnings estimate for 2014," analysts noted.
"If oil stays low, we think the industry would 'need' to grow fleet," analysts said, adding, "Our best ideas are SAVE, followed by American Airlines Group (AAL) and United Continental Holdings (UAL) ."
Separately, TheStreet Ratings team rates SPIRIT AIRLINES INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate SPIRIT AIRLINES INC (SAVE) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. We feel these strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."