Lower Oil Prices Could Mean Profits... Even For United

We may have seen the darkest of days for the nation's airlines. That's the word from one analyst with Morgan Stanley, who predicted Monday 2009 could be a profitable year for many airlines.

William Greene hasn't always been bullish on airline futures... and he admits it. Thomson Financial reports Greene says he's recently steered investors clear of airlines, telling them to hold their money until the industry reaches its tipping point -- which be predicted would come in the form of a global financial slump forcing many carriers to restructure.

Having said that, it's a wonder what a sustained drop in oil prices can do. Morgan Stanley now says the chances of such a 'tipping point' have decreased for 2009... and Greene predicts a number of US airlines may actually make money, if not much.

Continental, Delta, and JetBlue could all make money, he now says, as long as oil prices stay around $115 per barrel. Even United Airlines -- a fiscal pariah in the current market -- could post a profit as strong as $2.78 per share, Greene says.

Of course, that's assuming a lot -- specifically, that the volatile nature of oil prices will continue their current abatement, after coming perilously close to breaking $150 per barrel. Prices have since dipped as low as $112; at this writing Thursday morning, oil has rebounded to around $116 -- causing a resulting dip Wednesday to what had been rising airline stock prices.

Stil, that price is about right, says Energy Intelligence chief correspondent Axel Busch. "I think (the fall in price) was premised on a change in perception of the global crude oil market," he told Sky News.

Hey, that's change we can believe in.

FMI: www.morganstanley.com