Ahead of the open, J.P. Morgan raised its recommendations on UAL and US Airways, saying better-than-expected passenger demand, together with lower jet fuel prices and mild weather, has helped to vanquish a lot of anxiety over possible bankruptcies among the legacy carriers.
"Our updated liquidity models, which now focus on both unrestricted cash and total cash ... suggest legacy covenants are cleared and liquidity for AMR, US Airways, and UAL proves adequate," said J.P. Morgan analyst Jamie Baker.
The firm upgraded UAL Corp. to overweight from underweight, and US Airways to neutral from underweight. AMR's rating remained at overweight.