For most sectors, risky or not, you can find investors willing to roll the dice. Quick-changing technology, finicky natural gas, corrupt banks -- they all have their bulls at any given time. But one industry is largely abandoned, and for good reason. Warren Buffett said it best when he suggested that a forward-thinking capitalist should have shot down Orville Wright in 1903 for the sake of investors. But, believe it or not, there may be a diamond in the rough.

Let the losers consolidate
The major airline carriers are bloated beasts, going against the forces of nature and all that is holy to try to eke out a couple of bucks above breakeven quarter after quarter. It's like watching Bruce Willis try to convey emotion -- no matter how hard he tries, it just doesn't come together. Over the years, since the deregulation of airlines, it's been the M.O. for the major carriers to consolidate and dive in and out of bankruptcy.

Most recently, US Airways (NYSE: LCC) has been aggressively courting American Airlines (NASDAQOTH: AAMRQ.PK). The CEO of US Air cites economies of scale and route synergies as a value driver. My opinion? It's going to be an extremely costly integration, and the unions are going to have a throwdown brawl over the details. It may help both airlines down the line, but value for investors and travelers will not be realized for quite some time, if ever.  

US Air has been buoyed by attractive fuel prices and its position as the stable party in the US Air-American consolidation, but I see a storm ahead in its path.

Delta Air Lines' (NYSE: DAL) 2008 merger with Northwest Airlines seemed to bode well for Delta's stock -- the price went from less than $6 to today's $10 -- but the merger may not have done as much for customers. As one example, in a recent report from the Memphis Business Journal, the Memphis airport has seen a 46% decrease in flights since the merger and subsequent route cuts.

For the major carriers to ultimately succeed, there needs to be a marriage of profitability and customer satisfaction -- the two need not be mutually exclusive.

I don't know when that will happen in such a brutal industry climate. For now, it seems the rule is "the more nimble, the better." Smaller airlines seem to create positive free cash flow while creating happy travelers. Compared with their bigger brethren, who are focusing solely on the most profitable routes and alienating consumers, these are much more attractive companies.

White knights on dark horses
Two U.S.-based airlines have a fighting chance, but to me there is only one with significant upside to warrant a piece of the college fund. I'm talking about Jet Blue (Nasdaq: JBLU). This airline appears to be one of the most consumer-oriented shops in the business. While other airlines are cutting routes to save some cash, Jet Blue is expanding offerings in Boston and the Caribbean.

Jet Blue started out as a fare-based airline -- attracting customers on the premise of cheap seats. But what emerged from the discount model was interesting: Jet Blue became a premium airline with competitive pricing. Today it remains one of the most comfortable rides in the sky -- leather seats, great in-flight entertainment, free snacks, and more. Consumer opinion of airlines is constantly declining as the big shops charge us for everything from carry-ons to boarding passes. The airlines have historically been a commodity business, but I believe the model may be flipping. If a fare is $40 higher than another but doesn't include the nickel-and-diming, more travelers are going to pony up the extra cash.

Besides comfy seats, Jet Blue has other attractive features. The company's debt load is under control, and the stock is still off 57% from its 2002 IPO. At less than 8 times forward earnings, the company is more expensive than the major carriers, but it's because the market recognizes the ability for this company to turn a profit.

Southwest Airlines (NYSE: LUV) has a chance as well, though I am not as impressed on fundamentals. The company trades similarly to Jet Blue on a forward P/E -- both much higher than Delta's 3.5. Southwest has been known to be a consumer-oriented airline, with a crew unafraid to make jokes and a meritocracy system of seat selection. It's the people's airline, and it's increasing its appeal beyond cheap fares as well. Just recently, Southwest started offering live TV on select flights to compete more directly with Jet Blue.

Flight path
Jet Blue is expecting a big spike in maintenance fees this year, as its maintenance cycle is coming up for many of its planes purchased in the mid-2000s. That will hurt the bottom line to some degree, but view the pullback as an opportunity, because the following year will have dramatically lower expenses. I'm keeping an eye on free cash flow, improving corporate travel numbers, and more favorable fuel prices.

Southwest benefited for years from its effective fuel hedging, yet those benefits are winding down. If it can replicate its success, though, then this airline deserves a second look as well.

Airlines are a hard beast to love, and you may not think they're worth it. I'm fascinated by the industry and would love to see one of these picks emerge as a profitable airline -- something that is currently an oxymoron. Sound off in the comments. I want to hear your opinion.