There's an old saying in stock circles: "It's easy to make a small fortune investing in airlines. First, you start with a large fortune ..."

This week, we learned the worth of that ancient gem. You see, while suppliers like Boeing (NYSE: BA) appear to be off to a good start this year, when the Associated Press crunched some numbers this week, it came to the startling conclusion that -- gasp! -- U.S. airline companies remain a pretty poor investment idea. According to AP, recent earnings reports out of the four big "legacy" airline companies show "a combined loss of more than $1 billion for the first quarter" of 2011. Despite raising fares "seven times" in just four months:

  • American parent AMR (NYSE: AMR) lost $436 million.
  • Delta (NYSE: DAL) reported a $318 million loss.
  • United Continental (NYSE: UAL) lost $213 million.
  • US Airways (NYSE: LCC) reported a $114 million loss.

To find any good news at all in the industry, you have to travel downmarket to the likes of discounters such as Southwest (NYSE: LUV) or JetBlue (Nasdaq: JBLU). Yet even there, you can count the millions they made on the fingers of one hand: $5 million for Southwest, $3 million for JetBlue.

Mistakes were made
Despite all the bad news, AP puts a positive spin on the airlines' tailspin, noting that as bad as things look, the losses so far have been "not as large as analysts had feared." Plus, management's aware of such issues as high fuel costs, and loss of Japan revenue (due to Fukushima), and airline execs are said to be "talking tough," planning to push through ever more price hikes (hooray?) and cut capacity until profits return.

All of which sounds good, until you remember that other old investing gem about airline investing -- the one penned by none other than Warren Buffett himself: "When management with a reputation for brilliance tackles a business with a reputation for poor fundamental economics, it is the reputation of the business that remains intact." Too true.

And I mean that literally. Too true.

Is there any hope for airline investors? If none of the above has succeeded in scaring you off (or if you're just a fan of disaster movies), then add a few of these stocks to your Fool Watchlist, and see how they perform. Click here to add Delta, here for Southwest -- lather, rinse, and repeat.

Fool contributor Rich Smith owns shares of Southwest -- the only airline he knows of that's never had an unprofitable year, and a Motley Fool Stock Advisor recommendation to boot. Check out his latest stock recommendations on Motley Fool CAPS. The Motley Fool has a disclosure policy. Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.