Among specific airlines, Corridore cut United Airlines parent UAL Corp. to sell from buy, cut Continental Airlines Inc. to hold from strong buy, Alaska Air Group Inc. to strong sell from sell and AirTran Holdings Inc. to hold from buy.
The analyst wrote that it had been his view that United, "as one of the airlines beaten down the most by oil, could benefit from a popping of the oil bubble." Now, however, we "view oil as unlikely to materially drop."
Though most all airlines are suffering due to fuel prices, most of the large carriers have ample cash to survive into 2009. But those cash hordes will not last forever, and United along with American Airlines parent AMR Corp. and others could run into liquidity troubles next year if things do not improve by then. - Lou Whiteman
See Dealwatch: Airlines
Standard & Poor's equity analyst Jim Corridore downgraded the airline industry from neutral to negative on Tuesday, giving up hope that the sky-high fuel prices that have crippled carriers will reverse any time soon.
