I’ve always considered airlines to be, hands down, the easiest way to lose money in the markets.

An industry with strong unions, a high degree of government regulation (some of it certainly justified, like safety), and competition willing to take large losses to maintain market share just doesn’t get me interested.

And yet, now that the airlines are on the verge of collapse once again, I’ve realized there is opportunity in this beaten-down sector. Airline stocks are falling across the board, and the contrarian inside me is starting to get interested.

When stocks go on sale and fear is running rampant, that’s when I think about becoming a buyer. Right now there is no perhaps no bigger firesale than the one going on in the airline sector. This perpetually cash-strapped industry is on the verge of yet another round of bankruptcies… and this time the problem is far bigger than declining ticket revenues.

The problems run deep. Simply charging an extra $5 for a meal or hawking some designer sunglasses for $200 apiece isn’t going to save the airlines. A renegotiated contract with the pilots’ union isn’t going to help much, either. These cost-reducing activities just delay the inevitable.

The United States airline industry is truly on the brink. As it stands, things could get bad enough for the government to step in and just run the whole deal. If you think delays and cancellations are bad now, you haven’t seen anything yet.

The Airlines’ Dirty Little Secret

The airlines have many problems, but one in particular stands to bring the entire industry to its knees. It’s true that record-high fuel prices are killing profits and outdated air traffic control systems are creating costly delays and cancellations. But the truly big problem is age.

The majority of aircraft in U.S. airline fleets are between 20 and 30 years old. Now, that’s not much of a concern for the time being. After all, the U.S. Air Force is still flying around B-52s that saw action in Korea.

Airframes last a long time, but maintaining them costs a lot, too. In the case of the B-52s, it takes about $4 million a year in maintenance expenses just to keep a single plane up in the air. Airlines simply don’t have the cash to pay for maintenance on their fleets.

That’s it, plain and simple. Old jets are bogging down the entire domestic airline industry. We’re just starting to see the impact of the problem.

In March, for example, Southwest Airlines (LUV:NYSE) had to ground 38 jets. The problem was fuselage cracks. In Southwest’s defense, this is a problem affecting many older aircraft. If inspected and deemed safe, it’s not much to worry about. When Southwest failed to inspect the planes and regulators got wind of it, however, there was no other solution than to ground a big part of the fleet.

Last week, American Airlines ran into similar troubles. The legacy airline, owned and operated by AMR (AMR:NYSE), was forced to cancel more than 2,500 flights as the FAA discovered wiring issues in almost half of American’s domestic fleet.

Wiring problems…fuselage cracks…these aren’t widespread issues for new planes.

United We Stand…

This problem affects nearly the entire industry on a domestic level. At the same time, bad news for U.S. legacy carriers spells profit opportunity for strong overseas competitors.

Take a look at EasyJet, for instance — a European discount airline franchise. EasyJet’s airplane fleet has an average age of just 2.3 years. In most cases, EasyJet is flying aircraft two decades newer than U.S. based airlines.

This problem is nothing new for domestic air carriers. In my premium investment advisory service, BreakAway Investor, we took a look at who has the solution. After taking a top-down view of the industry, we selected AAR (AIR:NYSE).

AAR provides maintenance services to the airline industry. In picking AAR, I thought we isolated the company that had the solution. However, after holding the stock for about a year, we noticed that sales weren’t increasing as fast as they should, considering the state of airline fleets.

Now, I’m not going to sit here and say I knew about the cracks and wiring problems. But we did uncover a big problem — and the company with the solution to that problem. That usually results in some pretty nice returns. In this case, however, the airline industry just wasn’t spending as much on maintenance as we expected.

When the markets started to dive and recession fears took hold, we knew the airlines simply wouldn’t be laying out the necessary cash to keep up their fleets. They simply couldn’t afford it. So we took a 25% gain on AAR and ran… fast.

Is there a solution to the aging aircraft issue? Not a near-term one. Bob McAdoo, an analyst at the Prudential Equity Group, states, “Very few new planes are scheduled for delivery to domestic airlines this year or next.”

That’s a problem for travelers in the United States, but an opportunity for investors. Let me explain.

Everything’s New

Over the winter, I took a six-country tour of Southeast Asia just to try and get an idea of how the region is progressing. Although they are certainly in different stages of development, these countries all have one thing in common: Everything is new.

Airports, office building, apartment buildings, bridges… everything. It’s all new. This was even more apparent in the airline industry. They’re all buying brand-new planes. All 10 of my flights in the region were on a fairly new aircraft.

The international airlines have a distinct advantage here, and aging aircraft will be an ongoing problem for domestic airliners. The plunges in share values over the past week are just the start. Once again, the airline industry is the easiest place to lose money.

That is, except among foreign carriers that have the financial wherewithal and orders in place for new aircraft. They’ll be the ones raking in profits from a global travel boom. Newfound emerging market wealth is creating a lot of opportunity, and this is just one example.