Broad but shallow rally in most US airline stocks

NEW YORK (AP) -- Shares of several U.S. airlines rose in afternoon trading Tuesday, as Barclays raised price targets for several of the companies on the expectation that airlines will benefit by limiting the increase in seats they offer.

Major U.S. airline stocks have beat the Dow Jones industrial average and the Standard & Poor's 500 so far in 2013. The airline industry has been consolidating through mergers, and the remaining carriers have controlled the supply of seats, giving them more power to raise fares and increase revenue.

Barclays analyst David Fintzen said the market has only begun to recognize the airlines' improved performance. He said the results showed that the industry is healthier — it's not just looking better in comparison to "the lost decade" of the 2000s, when several big carriers went through bankruptcy.

"We also believe industry returns can still move higher, driven by our expectation that (passenger-carrying) capacity will grow below real GDP through at least 2016," Fintzen wrote in a note to clients.

The analyst raised his target price for United Continental Holdings Inc. shares to $35 from $29; Delta Air Lines Inc. to $21 from $17; Alaska Air Group Inc. to $60 from $48; Spirit Airlines Inc. to $30 from $24; Allegiant Travel Co. to $100 from $90; Southwest Airlines Co. to $16 from $15; and JetBlue Airways Corp. to $7 from $6.50.

In afternoon trading, shares of United, the world's biggest airline, were up 1 cent at $31.91; Delta was up 22 cents to $16.53; US Airways Group Inc. was up 7 cents at $16.67; Southwest rose 19 cents to $13.05; Alaska gained 39 cents to $62.71; and Allegiant Air's parent rose 11 cents to $85.94.

Shares of JetBlue were down 5 cents to $6.80; and Spirit was off 28 cents at $25.67.