I'LL FLY AWAY OLD GLORY, I'LL FLY AWAY

JP Morgan reports a 4% increase in Continental Air (CAL) Revenues per Available Seat Miles in January. The nice increase implies that revenues will be up about 7.4%. The airline experienced a record load factor of 76.1%.

Delta reports January traffic was up 12% and a load factor of 71.8%. CAL, DAL, NWAC and a number of international carriers code share. These carriers feed one another. The evidence to date is the new fare reforms are not hurting like many said they would.

These are out of favor beaten down stocks. The worst may not be over. The fate of the bankrupted USAirways and United Air is not known. UAL or USAir may face liquidation. Without further labor concessions DAL and actually either of the others could face liquidation. Should any major line be liquidated, the surviving players should all benefit.

As true with any industry struggling through a down-turn, tough choices are being made. Delta closed a hub, USAir closed maintenance facilities, etc. Papa John said it is time to get into the chicken business when everyone else is getting out. I have added to my airline positions.

Warning: high risk securities are never recommended. Each investor must try to appreciate the risks and make his own decisions. Reputable stock market services such as Morningstar state unequivocally that these stocks are unlikely to show a profit in the entire year of 2005. Morningstar believes money is invested better elsewhere. Morningstar reports are available at www.morningstar.com.