In past economic cycles, most major U.S. airlines tended to make profits in the “up” arc of the cycle and then lose a large amount of money in the down part. Within the last four years, the macro environment has been down sharply with only a very slow recovery indicated in the past three—so why are the airlines earning profits? Investors and the stock market still do not yet fully believe what they are seeing, according to current valuations of airline stock prices.

Rankings show that smaller airlines are more likely to be peak performers.

All carriers in the Top-Performing Airlines (TPA) study are now scored using a single algorithm. Prior-year results have been restated to reflect this. The scoring methodology represents a composite of five performance categories (and their contribution to total score):

New flight trials for X-51, X-48, Phantom Eye demonstrate advanced vehicles

Rank: 6th, revenues of $2-6 billion 2011 sales: $2.8 billion

News that Airbus is close to announcing it will set up a final assembly plant for its A320 jet in Mobile, Ala., is reverberating across the aerospace industry. The move would give the European airframer a manufacturing beachhead in rival Boeing's home market (p. 33). And French labor unions can't be pleased: Workers in southern, non-union U.S. states don't expect 35-hour workweeks and eight weeks of vacation per year, and can be laid off more easily when hard times hit.

Rank: 1st, revenues $250 million-2 billion 2011 sales: $1.5 billion

When Boeing Commercial Airplanes (BCA) was riddled with program missteps and uncertainty five years ago, it tapped talent from its defense side. The man who became the leader of that change, Boeing Commercial Airplanes CEO and President James Albaugh, defied skepticism to meet a set of tough goals. Last week, Albaugh unexpectedly announced his retirement, but the company did not have far to look for a successor. A hometown boy and 34-year BCA veteran, Raymond Conner, was standing in the wings.