updated 7/11/2005 6:05:11 PM ET 2005-07-11T22:05:11

A couple of major U.S. airlines may return to the black in the second quarter after years of losses, catching up to their low-cost competitors.

Analysts surveyed by Thomson Financial expect Continental Airlines Inc. and Alaska Air Group Inc. to report a profit for the second quarter, ended June 30.

"We believe many of our companies will report slight earnings surprises in the second quarter," Lehman Brothers said in a research note. Lehman seeks investment-banking business with airlines.

Some analysts even say the world's largest airline, AMR Corp.'s American Airlines, may post both a net profit and operating profit for the first time in more than four years. American reported operating losses for the past 17 quarters, and only reported a net profit in the second quarter of last year because of restructuring gains.

U.S. airlines have reported strong traffic for the past three months, and have been flying fuller airplanes than last year. That's brought in more revenue for the airlines, which continue to struggle with heavy fuel costs.

Further, airlines have managed to boost fares here and there because of the stronger demand, though some attempts to hike prices in the past few weeks have failed.

Continental said earlier this month that it is selling tickets at higher fares.

In light of stronger traffic and revenue, some analysts have become more optimistic recently about airlines' fortunes.

Goldman Sachs last week boosted its forecast for American's second-quarter earnings to 20 cents a share from a prior forecast of 5 cents. While most analysts still think the airline remained in the red during the second quarter, some speculate American might join the ranks of the profitable, comprised almost entirely of low-cost carriers and regional airlines.

Still, Goldman said consistent profit isn't likely for the airline industry because oil costs more than $50 a barrel. And analysts expect Delta Air Lines Inc. and Northwest Airlines Corp. to post deep losses again in the second quarter.

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