Buckle up airline investors, 2017 may be another good year. 

"Although U.S. airline profits peaked in 2015, we have revised our view on where we are in the economic cycle (presently in the 8th year of expansion) in light of the U.S. election and the growing likelihood that we could see material fiscal stimulus initiatives in 2017," wrote Deutsche Bank analyst Mike Linenberg in a recent report.

"This should translate into a stronger demand environment which would be very favorable for economically sensitive companies such as airlines," Linenberg said. Deutsche Bank forecasts U.S. GDP growth of 3% in 2017 and 3.3% in 2018.

Airline share prices were generally higher in 2016, led by Hawaiian's 61% gain and Spirit's 45% increase. United  (UAL - Get Report) rose 27%, Southwest rose 16% and American (AAL) and Alaska both rose 10%. Declines were minimal: Allegiant and JetBlue declined 1%, while Delta (DAL - Get Report) declined 3%.

Three points appear to support a continued positive outlook.

First, many investors and analysts focus on an industry metric, revenue per available seat mile. RASM tracks the revenue generated by one passenger flying one mile. It has started to increase.

In 2016, generally low fuel prices led to lower fares, which led to lower RASM, which for much of the year kept share prices low. November was the 20th consecutive month of domestic RASM declines and the 30th consecutive month of international declines.

Higher fuel prices, which seem likely in 2017, will likely support higher RASM. American, Delta and United seem to be racing to see who will be first to report a positive number.

Secondly, "We began to see a change in external perceptions during 2016," American CEO Doug Parker wrote in a year-end message to employees.

Warren Buffett, the famous value investor who had spent 25 years decrying airline investing, recommitted to the industry in November.

In a Securities and Exchange Commission filing on Nov. 14, Buffett's firm disclosed that during the third quarter it acquired airline shares valued on Sept. 30 at about $1.3 billion. American shares accounted for about $800 million.

"In our prior life, American didn't deserve long-term investors, because our long-term prospects were unclear," Parker wrote. "But thanks to the hard work and sacrifice of the American team, that is no longer the case. Our future is bright and the world is noticing."

The third reason for confidence is that the four major carriers seem committed to limited capacity increases.

Stifel analyst Joseph DeNardi estimates 2017 domestic capacity growth of 3.25%, including 2% growth at Delta, 2.25% at United, 0% at American and 2% at Southwest. "It's clear that domestic supply trends will be more favorable than in 2015 and 2016 when {available seat mile} growth increased 5% per year," DeNardi wrote in a recent report.

"We believe that 3.25% supply growth with a 3%-3.5% increase in GDP would support a PRASM increase, domestically, of 1.5% to 2%," he said.

As for profit forecasts, the International Air Traffic Association projected global airline industry 2017 profits of $29.8 billion, down from $35.6 billion in 2016.

For U.S. carriers, IATA expects post-tax profits of $18.1 billion in 2017, down from $20.3 billion in 2016. "Recent consolidation continues to underpin the region's strong profitability, even as the region faces upward cost pressures which include the price of fuel," IATA said.

Delta alone projects 2017 profits of $6 billion, which would be one-third of industry profits.

"It's about sustainability," Delta President Ed Bastian recently told Maria Bartiromo on FOX Business Network. "It'll be the third year in a row we hit a $6 billion profit level. That's something that this industry has never seen before."

Not everyone views the outlook positively.

"While 2016 may finish better than expected for the major airlines, the industry outlook for 2017 is sobering, with higher oil prices driving up fuel costs, higher labor costs, and slower economic growth -- hampered in our view by severe uncertainty and volatility with the bombastic new {U.S.} president and his administration," Gimme Credit analyst Vicki Bryan wrote in a recent report.

"This signals intensified competitive pressure which could lower already pressured fares, though we think moderately higher fuel expense may be passed through successfully," Bryan said.

"Delta comes into this scenario with the keen advantage of having the highest profitability and best credit quality; it's also completed most of its major growth spending projects," she said. "United and American are far behind Delta and they won't have the benefit of an expanding business environment."

Linenberg also cited Delta as his favorite major airline stock, but noted "we like the domestics," naming Southwest, JetBlue, Spirit and Allegiant. DeNardi said the "biggest winners" from slower domestic capacity growth will be Southwest, Spirit and Alaska.

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