) to reduce from buy and Delta Air Lines (DAL
) to neutral from buy.
Analyst Robert Ashcroft says Northwest and Delta are among major airlines facing a liquidity crunch later this year. With regard to the airline industry on whole, he says expected strong first-quarter revenues will likely be overwhelmed if oil remains at a $50-plus per barrel for the remainder of 2005.
He downgrades Northwest, citing a risk of possible labor concession showdown later in 2005. He downgrades Delta, citing its potential demand for collateral, as both Delta's and United Airlines' processing contracts with Visa and MasterCard expire, which he thinks could accelerate Delta's slide toward Chapter 11.