) to underperform from neutral.
On Monday Atlantic Coast Airlines said its relationship with United Airlines will end.
Analyst James Higgins says no one who owns Atlantic Coast bought it for the uncertainty the company now faces. He says Atlantic Coast has yet to determine its new marketing strategy. Its plan to run a low-cost operation based on 50-seat regional jets is a difficult one; the plan to add larger Airbus or Boeing aircraft carries operational risks, as well as labor challenges and competition.
Higgins says without a relationship with United, Atlantic Coast looks like a competitive sitting duck for genuine low-cost carriers that are already operating larger jets, namely JetBlue and AirTran. He sees 70 cents 2003 earnings per share, and 91 cents for 2004. He cut the $12 target to $5.