) to market perform from strong buy.
Analyst James Parker says airline fares are still under severe downward pressure. He notes major airlines are seeing huge losses and are burning cash rapidly. He is downgrading because he says it is very difficult to predict when the majors will need to shrink capacity.
Parker also sees a grim picture: The possibility that US Airways and AMR, the parent company of American Airlines, will be approved for government guaranteed loans, but then spend that money on lower fares.
He thinks the substantially stronger economy and the retrenching of capacity by majors is more likely in calendar 2004 than in calendar 2003. He cut the $0.05 first quarter earnings per share estimate to a $0.10 loss, and cut the $0.71 fiscal 2003 (March) EPS estimate to a $0.05 loss.