The US airline sector saw gains on Tuesday on the news that Delta Air Lines will sell one of it’s units and that the outlook for Northwest Airlines is good. In afternoon trading, the American Stock Exchange Airline Index was up 3.9 percent to 49.36 points despite further gains in the price of crude oil, which is damaging profits to the airlines.

Delta announced plans on Monday to sell Atlantic Southeast Airlines to SkyWest for $425 million. The sale comes at a time when Delta, which says it will use the money raised from the sale to pay off debts, is struggling to avoid bankruptcy. Even though Delta warned that the sale might not prevent a bankruptcy, its shares jumped by 11.5 percent on the New York Stock Exchange, to $1.55, on the announcement of the sale.

None of this has stopped ratings agencies from downgrading Delta’s rating. Fulcrum Global Partners put Delta’s rating at “sell”, down from “neutral” and cut it’s target price from $3 down to zero, citing the impending possibility of bankruptcy. At the same time, SkyWest’s rating from FGP was left at “buy”, with a target price of $27 per share.

Meanwhile, shares in Northwest Airlines gained 12.4 percent to $4.69 on the Nasdaq as Morgan Stanley raised that airline’s rating from “equal weight” to “overweight” and put its target price at $9 per share even though a mechanics strike is likely to strike Northwest on August 20.