That said, there is basically two ways in my opinion to play this.
1. Figure out who owns the leases on their 50 seat regional jets, MD80s and 767s. Short them if you can. I doubt it as my guess is they are owned by boeing, ILFC (was owned by AIG a few years ago), EMB, etc. Some Hedge funds and large insurance companies may own some as well.
Note: I interviewed with a PE fund back in 2007 to work in their A/C leasing division (they most bought used AC and sold them to Latin American and Africa and some Asia) and was shocked at how they didn't know the real risks of their business. After the initial interview I told them I wasn't interested (I was planning on moving out of the NY area anyway (wife).
2. You can buy companies like Boeing, Embraer, Bombardier (new C-series) hoping that they score a major order. I find this very unlikely as AMR already made huge fleet decisions this summer and bought Airbus and Boeing. While they may be some acceleration of delivies, not sure if its possible as I haven't looked at their order books, these companies may have leasing losses as well.
3. Buy some basket of regionals who may benefit if AMR lets Eagle take the 50 seaters and shuts them down and buys/leases 70 seaters from someone else. Players here include Skywest, Pinnacle, and RJET. My favorite here is RJET. Their CEO has talked about shutting down the Frontier Brand business as its hemmoraging money, he's from their regional ops side and AMR could get more smaller newer fuel efficient planes from them quickly at market rates.
That said, I am not as up to date with whom is flying for whom and when their contracts are up and who owns the planes of these regionals. (This is what you need to know).
4. The last option would be to buy bonds of AMR hub airports if they took a hit. I haven't looked at it but after 9/11 (different situation) but bonds for ATL airport sold for 27. Buyers had a full recovery within a year and got paid a 40% yield. I'd be a buyer of DFW and MIA but not ORD or STL at this time.
