It took nearly a full decade for Americans to get sweet on the airline sector again. Following the tragic events in 2001 and record high oil prices in 2007, airlines literally couldn't catch a break. The industry has often been called a long-term loser and remains one of the few sectors that investing mogul Warren Buffett will not put his money.

Like much of the market since 2009, airlines have been flying high. Healthy profits have returned to most of the sector even with rising oil prices and domestic travel figures remain strong. But warning signs are beginning to pop up left and right, leading me to believe that the sector may be headed for a crash landing.

Insiders are selling
Insider sales aren't just slightly, or even moderately, outpacing insider buys -- they are crushing them. Running a screen of some of the largest carriers including AMR (NYSE: AMR), United Continential Holdings (NYSE: UAL), US Airways Group (NYSE: LCC), JetBlue (Nasdaq: JBLU), Southwest (NYSE: LUV), Alaska Air (NYSE: ALK), and Delta Airlines (NYSE: DAL) yielded zero insider purchases over the past six months! Not one insider purchase among these seven companies, yet 67 total insider sales. It'd be a mistake to read too much into this, as insiders will often sell around tax time, but this could be a warning that insiders see the sector as fully valued here.

Costs are rapidly rising
Fuel costs are always a concern for the airline sector, but a recent surge in oil prices is beginning to crimp profit projections. Fuel costs have jumped more than 25% over the year-ago period, and with many airlines being poorly hedged for higher oil prices, their margins could take some serious hits.

Every major airline has had at least one analyst slash earnings estimates over the past three months. For some, expectations have fallen dramatically. US Airways was expected to earn $1.05 this year just three months ago. Now estimates are for a profit of only $0.67, down almost 40% from before. AMR is in the same boat with a slight tweak – its loss expectations keep growing larger. An expected ($0.29) loss this quarter has ballooned to a loss of ($0.73) now.

China-like forward P/Es
The airline sector is in no way related to China, but it's certainly trading like some small-cap Chinese names. Delta Airlines, United Continental and US Airways all are trading at forward P/E's around 4. While many would regard this as a rampant undervaluation of the sector, I feel it's a signal from investors that no one trusts current earnings expectations. Far too many variables exist -- including rising fuel costs and the European debt crisis -- which could easily disrupt domestic and international travel. I'm not convinced that consumer spending can keep up with the current earnings expectations built into the sector.

Headed for a crash landing
It's saddening to think that the airline sector which finally got its wings back may be in line to get its wings clipped again, but that's the way the data is pointing. While there are stronger names in the sector to choose from, such as Alaska Air which has grown despite rising fuel costs, the rest of the sector looks like a free-fall waiting to happen. I'd exercise extreme caution investing in the airline sector moving forward. I'm also beginning to think that this Warren Buffett guy may know a thing or two about investing...

Would you put your money to work in the airline sector here? Why or why not? Share your thoughts in the comments section below, and consider adding these stocks to your watchlist to keep up on the latest news in the airline sector.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.