Most consumer hate airlines, but investors seem to love them. That's especially true for US Airways, whose shares have more than doubled this year, outpacing the stocks of major rivals, which barely managed to log double-digit gains.
But that's largely because US Airways got one of the worst beatings of all airline stocks in 2009. Investors worried that the nation's fifth-largest airline was running on empty, with far too little cash on its balance sheet. So it was really the prior year's weakness that gave US Airways' shares a nice springboard in 2010, said Soleil Securities analyst Jim Higgins.
But airline stocks overall got a fresh lift mid-year on hopes that more mergers may be in the offing following the announced deal between Continental and United, which had previously been in talks with US Airways.
A note of caution: Fuel costs remain high and Higgins warned that could add pressure to airline stocks, including US Airways.