What a difference a year makes for investors in airline stocks.
As summer 1989 drew to a close, shares of leading airline companies were soaring along at record highs, and the industry was brimming with takeover plans and rumors.
Today, many of the same stocks are virtually grounded, beset by recession worries and the surge in oil prices.
In the 12 months ending the last day of August, the Dow Jones index of airline stocks suffered a decline of 54.49%, which ranked it 79th in a field of 82 groups.
During that span, the carriers group bested only home builders, hotels and Eastern banks in stock market performance.
Consider UAL Corp., which traded as high as $294 last year when a group mapped plans for a $300-a-share buyout.
Last week, the stock hovered around $92.
Shares of AMR, parent of American Airlines, have tumbled in the same span from $107 to $45, and shares of USAir from just under $55 to around $17.
At Delta Air Lines, the ride was not quite so bumpy. But its stock is still down 35%, from $85 to $55.
The airline group has been in the line of fire of just about every unsettling development to hit the stock market the past year--from the collapse of the takeover boom to the crisis in the Middle East.
The first blow came Oct. 13 of last year, when the group putting together the planned acquisition of UAL disclosed that it was having trouble lining up financing.
That jarred investors' confidence to the point that the Dow Jones industrial index was driven down 190 points--in what was billed as a "mini-crash."
Almost a year later, work continues on a new buyout plan involving United Airlines employees, management and outside investors.
Even before Iraq invaded Kuwait on Aug. 2 of this year, airline stocks suffered further damage when oil prices crept upward and talk of a recession spread.
When the invasion occurred, oil prices skyrocketed overnight--and airlines were in a jet fuel price bind.
Their stocks fell again.
"The same factor that has created a panic in the broad market is working overtime on the transports, and it's easy to see why," says Stephen Leeb in his investment advisory letter Indicator Digest.
"Transportation companies are among the nation's largest consumers of oil. So higher oil prices escalate operating costs, reducing margins. And higher airline rates reduce overall passenger travel."
Paul Nisbet, an analyst at Prudential-Bache Securities, issued a sell recommendation on the industry after the Iraqi invasion.
"We expect the jump in jet fuel prices and slowing traffic due to a sluggish economy to cut earnings for the major airlines dramatically," he said.
With all the negatives weighing on the industry, however, some analysts say the time may soon be ripe to look for bargains among the depressed stocks.
Given expectations earlier this year of higher oil prices, Leeb said, "we've been bearish on the transports--but enough is enough.
"As long as America is in business, there will be a need for transportation. In fact, as the world continues to become more integrated economically, the need for transports will increase.
"There's a risk that higher oil prices will further torpedo earnings in the short term. But with the recent selloff, that's already reflected in these stocks' prices."