There aren't many airline stocks that are flying high these days. The airlines have been buffeted by intense competition, rising costs and a recession-induced slowdown in business travel. When Iraq invaded Kuwait, the airlines also were hit with higher costs for jet fuel. And, when the shooting in the Persian Gulf began, many passengers quit flying overseas.

In the midst of this bleak picture, however, there is one airline stock that may be poised to take off. The company is WorldCorp. Inc., of Herndon, which offers charter flights for both passengers and cargo.

Although WorldCorp continues to encounter financial and operational turbulence, it finds itself in the right place at the right time.

As a charter company, WorldCorp serves both commercial and military clients through its subsidiaries, World Airways and Key Airlines. One of its major clients is the U.S. Military Airlift Command, with whom the company has had a long-term contract relationship.

That relationship is proving to be both vital to the government and valuable to WorldCorp., which has seen more losses than profit in the past 15 months.

The recent surge in WorldCorp business began during the U.S. buildup in the Persian Gulf, with WorldCorp hauling military passengers to the Middle East. Recently, WorldCorp has been flying tons of cargo to the war zone.

For obvious reasons, no company likes to suggest that a war has increased its business. But it is no surprise that companies that make planes, tanks and guns experience a surge in both orders and profits.

Moreover, as a public company, WorldCorp is required to keep shareholders informed on changes in business conditions.

Thus, WorldCorp announced the other day that, as a result of Operation Desert Storm, it will see its January flying hours rise 25 percent over the same month a year ago. The company also expects to see the increase continue during February and March.

This surge in activity comes during what is normally a slow season for WorldCorp.

The exact amount of financial help that WorldCorp will reap from the gulf-related activity will become clearer when the company issues its fourth-quarter and year-end reports for 1990 in the next few weeks.

The added business may help to rescue the company's 1990 performance, which showed a loss of $4.2 million on sales of $219.7 million for the first nine months.

Trying to cautious and optimistic, President T. Coleman Andrews III recently sketched the outlook for the company this way:

"The combination of war risk, high oil prices and recession has savaged the airline industry," he said. "While WorldCorp faces uncertainty in the months and years ahead due to these factors and its high debt load, several elements of our strategy are serving us well in this period.

"First, by historically balancing our business between military and commercial activities, we have been able to offset revenue losses from war risk and recession on the commercial side with gains in revenue on the military side. Second, due to the nature of our contracts, we have been substantially less affected by higher fuel prices than other air carriers."

A. Scott Andrews, vice president for finance at WorldCorp, explained that WorldCorp had gotten a break on its fuel costs because it had arranged, in advance, for customers to bear the cost of increases. (Scott and Coleman Andrews are brothers.)

Scott Andrews also acknowledged that the Persian Gulf War, if it continues, could affect one of WorldCorp's main lines of business -- ferrying thousands of Muslims from Malaysia and Indonesia to Saudia Arabia for the annual pilgrimage to Mecca. The travel season runs from May to July.

Scott Andrews says he isn't sure what will happen to that business. But then the executives at WorldCorp are used to dealing with the unexpected.

Given the surge in WorldCorp's Persian Gulf business, investors who follow the company might have expected the stock to take off like a rocket -- the way other war-related stocks did in recent weeks.

WorldCorp shares have now begun to respond. WorldCorp stock, which opened the year at $4.375, closed last week at $6.25, a gain of nearly 43 percent.

There may be several reasons why the stock has not moved much, despite the chances for a sharp gain in profits.

One reason is that WorldCorp has been an on-again, off-again stock, selling for a little as $2 in 1986 and for as much as $15.50 in 1990.

For the last year, the stock has been mostly down, with the company reporting losses in the last quarter of 1989 and the first two quarters of 1990.

The losses were partly related to the ripple effect of a United Airlines DC 10 crash in Sioux City, Iowa, which resulted in new maintenance requirements for DC 10s.

But, there were other reasons, too, as the company admitted.

"... We took our eye off the ball," Coleman Andrews said in his 1989 annual message. "Some losses resulted from poor planning on our part, including failure to make adequate arrangements in advance for contract certain maintenance needs."

WorldCorp, which has about $80 million of 13.875 percent junk bonds on its books, is trying hard to reduce its debt load. It recently took advantage of a 50 percent drop in the price of the bonds to buy back about $20 million worth.

If WorldCorp has been an up-and-down stock, it has worked well for George Putnam III, editor of The Turnaround Letter in Boston.

Putnam is a specialist in picking stocks of companies in bankruptcy or in other kinds of financial difficulty with the expectation that the stocks will rebound.

Putnam recommended WorldCorp in November 1986 at $4, then sold it in September 1989 at $12.

Now, Putnam said, he has recommended WorldCorp again at $4.50, with a maximum buy price of $7.

"The stock has fallen back to a level where we think it is very attractive again," Putnam said.

"Even if the war with Iraq were to end quickly," Putnam added, "WorldCorp's services would be required for some time to ship personnel and equipment back and forth between Saudi Arabia and the U.S. This military business will boost the company, even if its commercial business weakens because of the recessionary environment in the United States."

Allied Research Corp. of Baltimore is a company that sells ammunition and weapons systems and, given the events in the Persian Gulf, is experiencing an upsurge in business. But President Reinald W. Carter has a small mystery on his hands. The mystery is why an investor named Kusai H.M. Al Azzawi is buying stock in Carter's company. Al Azzawi has been buying shares rapidly since November and recently told the Securities and Exchange Commission that he now holds 14 percent of the company's stock. Al Azzawi lists his address as Riyadh, Saudi Arabia.

Carter says he doesn't know anything about Al Azzawi -- but keeps getting copies of Al Azzawi's SEC filings sent from a bank in Switzerland. Nor does Carter know what Al Azzawi's intentions are, nor how much stock he plans to buy.

The stock, however, is getting more expensive. It sold at $4.375 last week, up from $3.25 at the start of the year, a gain of about 35 percent.

Stock analyst Benjamin J. Peress, who jumped from Johnston, Lemon & Co., to Ferris, Baker Watts Inc. has moved again -- this time to Justin Asset Management Inc. of Arlington. At Justin, which manages about $35 million in individual and corporate accounts, Peress will be a senior research analyst and a portfolio manager. Peress bought a 25 percent stake in Justin.

Peress is being joined at Justin by Allen C. Outlaw, who formerly worked as a broker at Wheat, First Securities Inc. and at Johnston, Lemon. He will work in the areas of marketing and portfolio management.

Meanwhile, back at Ferris, Baker Watts, the investment division has hired Margaret Burke Whitfield as director of research, the same title formerly held by Peress.

Whitfield, who has 22 years experience, was formerly director of equity investments at Geico Corp.