The summer sun is seducing stir-crazed American families tired of penny-pinching. Add to that a strong dollar and I predict that those who can will travel.

Now, as swine flu continues to make the news, it will perhaps prompt some to avoid cruise lines and foreign travel to “high-risk” destinations.

That leaves European and domestic travel and as airlines have taken a hit lately, I chose that industry to sort through for just the right bargain.

JetBlue Airways Corporation (NASDAQ:JBLU), Deutsche Lufthansa AG (ADR) (OTC:DLAKY) and Air France – KLM (ADR) (OTC:AFLYY) look to be ready to bounce, but not as high as these two airline stocks…

Cleared for takeoff

On the domestic front, AirTran Holdings Inc. (NYSE:AAI) has felt the recession like other airlines. It announced earlier in the week that it anticipates a drop in second quarter revenue of perhaps as much as 7%.

And like its competitors, it will seek to mitigate the loss by cutting capacity around 8%.

But Airtran is small and consolidated. But the most compelling aspect of this stock is its fundamentals. Its got a forward P/E of 5.52 and a tiny PEG of .18.

The price and most importantly, the timing, are just right to invest in this company.

I recommend you buy shares of AirTran Holdings Inc. (NYSE:AAI) at or under $5.75 and hold on for 20% gains in the next 6 months.

My other pick is British Airways plc (ADR) (OTC:BAIRY). To cope with declining business, the company asked pilots to accept a pay cut in return for shares. The pilots agreed.

I think they were right to… The companies P/E of 4.02 is just where I like it to be, and the current share price is under half of its 52-week high.

British Airways is set for a rebound.

I recommend you pick up shares of British Airways plc (ADR) (OTC:BAIRY) under $23 and hold on for at least 20% gains in the next 6 months.

Source: The Best Way to Play a Strong U.S. Dollar