NEW YORK (TheStreet) -- Veteran JPMorgan airline analyst Jamie Baker said he doesn't get why airline stocks continue to slump despite several recent signs that carriers are cutting back on capacity growth plans.
In a note issue late Thursday, Baker wrote that several recent developments -- including Delta's (DAL) attempt on Thursday to again raise domestic fares, just a week after an industry-wide domestic fare increase took effect -- makes him think an end to the airline share price slump may be overdue.
"Sentiment remains poor, despite improving headlines," Baker wrote.
Also, domestic fares are rising, whether or not the industry follows Delta's lead in imposing a $2 one-way, across-the board domestic fare increase. Baker said he would be surprised if the industry follows Delta's lead "but we see no harm in trying."
Baker thinks the positive developments suggest "that industry discipline is alive and kicking.
"Frankly, we're puzzled as to why fundamentals still remain overwhelmed by negative sentiment," he wrote. "Whether this means that stocks are likely to start working soon or to wait to digest anticipated capacity cuts as part of the 2Q earnings is unclear to us. But when sentiment gets this bad and the phones (at least ours) stop ringing, a turning point for equities typically follows, in our experience."