Can airline investors finally put away their motion sickness bags? It's been a rocky few years for the sector. Even before the catastrophic events of 9/11 chased away potential passengers, it was already an industry in fiscal turmoil. Nimble low-cost competition from the likes of Southwest (NYSE:LUV) and JetBlue (NASDAQ:JBLU), restrictive labor contracts, and greedy executives all added up to significant losses for the major carriers.

While the skies aren't exactly clear these days, at least the turbulence has settled down long enough to allow investors the ability to unbuckle their seat belts and move about the cabin.

Yesterday, Continental (NYSE:CAL) and American Airlines parent AMR (NYSE:AMR) posted higher load factors. Expressed as a percentage of occupied seats, the respective 74% and 70% showings for the month of October are an improvement over last year's levels. Unfortunately, one has to temper the good news with the fact that both companies have scaled back their capacity over the past two years. This is like owning an unpopular restaurant, removing a few tables, and then claiming that there are less empty seats in the eatery.

But Continental was able to actually grow its traffic -- and its average revenue per available seat mile -- despite the slight reduction in capacity. That's a great sign. Naturally, the small carriers are faring even better as AirTran (NYSE:AAI) grew its October traffic by 33.6% on a 21% increase in capacity. Ironically, AirTran's load factor of 69% for the month trails its larger peers. But that's fine given the lower overhead.

So maybe the coast isn't exactly clear for the debt-laden heavies. They still have to compete with the JetBlue mentality of putting out a quality product at a discounted fare. Some like Delta (NYSE:DAL) have simply opened their own version of JetBlue. But the reinvention process is never easy. For now at least, they should be content that passengers are starting to take flight in growing numbers again. Without that, reinventing the buggy whip would have been pointless.