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The buzz around Canadian airlines Add to ...

It's been a long time coming. And it must feel good.

After so many waves of financial struggles and rising fuel prices, Canadian airlines finally have some legitimate air under their wings. Although certain names, like Porter, had already garnered solid attention, the wider industry now has enough momentum for analysts to suggest that investors should go long on the sector.

WestJet Airlines Ltd. and Air Canada's latest earnings underscore the hype. WestJet posted what TD analyst Tim James called "exceptional results," and the company has also shown it is trying to balance market share growth with fiscal responsibility. On the expansion front, WestJet signed an interline agreement with Delta Airlines, but it is also showing restraint by deferring some aircraft deliveries.

Air Canada's quarterly results weren't as dominant, but they certainly were solid with passenger yields rising, particularly in the lucrative premium segment that is tied to loyalty programs. More importantly, the company posted its first annual profit since 2007.

What does that mean for deals? Right now, probably not much. ACE Aviation Holdings Inc. already unloaded more of its position in Air Canada in December. And WestJet recently instituted a normal course issuer bid to improve its return on capital. But another quarter or two of solid results could get people talking about a certain IPO again.

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