Airline shares jump on hopes that worst is ending CHICAGO (Reuters) ? Shares of large U.S. airlines jumped Friday, led by a big gain in Continental Airlines, as analysts said the worst of the downturn may soon be over though huge losses will continue. The American Stock Exchange airline index rose about 11%. "Although the industry has a ways to go before it is healthy again, it appears that the worst may be over for the airlines," Merrill Lynch analyst Michael Linenberg said in a note. Merrill Lynch on Friday raised its rating on Delta Air Lines, Northwest and Continental to "buy" from "neutral." They are the third, fourth and fifth largest U.S. air carriers respectively. It also raised its rating on Alaska Air Group and low-cost carrier Frontier Airlines to "buy" from "neutral." U.S. airlines have reported billions of dollars in losses since the Sept. 11 attacks, including bankrupt United Airlines parent UAL posting a $1.3 billion quarterly loss on Friday. Airlines have been hurt in recent weeks by the war in Iraq and the pneumonia-like virus SARS. The war hit U.S. airlines hardest on trans-Atlantic routes, while SARS has hurt trans-Pacific travel the most. Linenberg said he still expects U.S. airlines to report net losses of $8.2 billion in 2003, and $2.5 billion of losses in 2004, further overextending debt-laden balance sheets. Also, late Thursday Continental said unit revenue was flat to down 2% in April from a year earlier, better than expected by some analysts given the war and SARS. Continental is the only major airline that consistently reports monthly unit revenue estimates, which are considered a rough proxy for industry results released later in May. "Given the end of the Iraqi war, and barring potential impact of heightened SARS fears in the U.S., we believe total industry unit revenues have bottomed out ...," Credit Suisse First Boston analyst Jim Higgins said in a note. SARS will likely keep Pacific revenue soft at least two more months, most affecting UAL and Northwest, Higgins said. *************************************************** The owner of Roger's Trinbago Site/TnTisland.com Roj (Roger James) escape email mailto:ejames@xxxxxxxxx Trinbago site: www.tntisland.com Carib Brass Ctn site www.tntisland.com/caribbeanbrassconnection/ Steel Expressions www.mts.net/~ejames/se/ Site of the Week: http://www.pscutt.com TnT Webdirectory: http://search.co.tt *********************************************************