Leo,

Good plan. Another general rule is don't invest any money in stocks below $10 a share that you don't want to lose. There's a reason why it's that low.

If you need to be in an airline, go with "best of breed", or the best 1-2 companies (works in any sector) so for airlines that would be: CAL (which is still fundamentally bad) but overseas such at Ryanair or Cathay (I own Cathay... up 30% since I bought it in July). When you get down to it, there is no growth in the US Airline industry, which is bad. US Airways saw the move because America West of buying a complementary route structure and aircraft at a fire-sale price, and the US Air investors were happy because they were going to get some money.

A better play would be on companies associated with Air Travel since that is doing well as a whole. Companies like this would be Boeing or Sabre (though I think Sabre is being taken private?), or others that provide some service to the industry.

I think US airlines will suck investment wise until capacity gets aligned with demand and a bunch of mergers take place...but, you can look all the way back to the 1930's where people were saying that airlines were a great place to turn a million dollars into nothing!

HTH
Spongebob