Don't even think about investing in airline stocks

To be fair, excluding one-time charges would have cut the loss to $340 million or 50 cents per share. But the loss was still substantial and troubling for investors. Analyst had expected an adjusted loss of only 38 cents per share.

Shares of DAL tumbled on the news. The stock, already weak so far this year, fell by more than 20% Tuesday to close below $8 per share. That brought the year to date loss of market value to more than 30%.

The stock is a real stinker. That's why I made the stock one of my Top 10 Stocks to Avoid in 2009.

DAL is up about 10% today, but my research suggests that there will be more carnage at DAL for the remainder of the year.

In discussing the big loss, the company acknowledged that weakness in the economy was impacting leisure travel (no kidding!), but the company claims that it can be profitable in 2009 if fuel prices remain at current levels.

The catch 22 for Delta is that fuel prices are unlikely to remain at current levels. Even worse, the experience of poor hedging results means the company is unlikely to hedge against higher prices for fear of short-term losses if oil prices fall.

The reality in the oil markets is that prices have fallen due to failed speculation instead of supply and demand dynamics. Forced selling of crude contracts purchased during the run last year resulted in lower oil prices.

While demand destruction was real, the price of crude has gone well below were they would be running without that forced selling. In a normalized environment investors can expect crude to be running between $50 and $60 per barrel, or nearly double current levels.

Such a state would put a big wrench in Delta's profit hopes that appear to rely on stable prices. More importantly, as consumers adjust to flying less, a recovery in passenger revenue miles flown is unlikely this year.

Jamie Dlugosch is a contributor to InvestorPlace.com.