Warren Buffett's bet on airlines is a sign of confidence in the industry and in new growth opportunities in the United States, former Continental Airlines CEO Gordon Bethune said Tuesday.
"The airline industry isn't what he invested in in 1989. It's certainly transformed itself," Bethune told CNBC's "Squawk on the Street." "I've never seen it this good. ... They've got really stable fleets, the economy's doing well, … I wouldn't underestimate these guys."
Bethune said he was uncertain whether OPEC will cut production to prop up oil prices. Even if it did, he added, airlines are able to protect themselves.
"You rarely sell tickets more than 90 days out, so you have the chance to recover" from rising oil prices by raising ticket prices, Bethune said.
The big profit-killer is always national or international unrest, which is unpredictable to a degree, he said.
"The World Trade Center, big problems in the Middle East, those tend to dampen markets and dampen travel and dampen enthusiasm for investment," the former CEO said.
Airlines are subject to the same effects as the rest of the economy when it comes to those threats, so if other stocks slump, "the airlines are definitely going with them," Bethune said.