This week we’ve now seen downgrades and dire comments from both Credit Suisse and, as of this morning, Jamie Baker with JP Morgan.

But more potentially troubling to the airline sector than the expected stock price worries, given the higher price of oil, Standard & Poors said yesterday that they were now taking a hard look at the credit ratings of all the major airlines that they track. That would be a total of ten.

Currently, three of those airlines have positive outlooks, six have stable outlooks, and one has a negative outlook.

In particular, the agency says that it is taking a hard look at its “positive” outlook ratings for AMR, Delta Air Lines and US Airways.

S&P noted that except for Southwest Airlines and Alaska Air Group, the airlines “have a relatively low proportion of their 2008 fuel needs hedged, because hedging high and volatile fuel prices is expensive and may require posting cash collateral.”

S&P also noted that while airlines have taken advantage of strong demand and raised fares to offset higher fuel prices, it expects that this trend will stall across the industry in the face of softer demand, likely first on domestic routes and then in international markets.

In addition, it pointed out that though US airlines have built up their cash and in a few cases, bank liquidity over the past years as a cushion against adverse conditions, most of them have at least part of their short-term investments in currently illiquid auction-rate securities.

The rating service says it expects to complete its review by the end of the month.

Tickers: (NYSE: LUV), (NYSE:AMR), (NYSE: DAL), (NYSE: LCC).

Technorati Tags: airlines, American Airlines, Delta Air Lines, Southwest Airlines, US Airways