More turbulence ahead for airlines, Goldman says

More turbulence ahead for airlines, Goldman says
12 July 2012, by Arti Patel - San Francisco (MarketWatch)
http://www.marketwatch.com/story/more-turbulence-ahead-for-airlines-goldman-says-2012-07-12

Excerpt:

Goldman Sachs initiated coverage Thursday on the U.S. airline sector, cautioning investors the best of the bunch deserve only a neutral rating and slapping a sell recommendation on the nation’s two biggest carriers.

With negative near and long-term expectations for the sector, Goldman analysts led by Tom Kim told investors the industry remains “structurally challenged by the constant threat of new entrants, high operating and capital costs and elastic demand in prices.”

Goldman rated legacy carriers Delta Air Lines Inc. and United Continental Holdings Inc. a sell, saying they “are vulnerable to earnings pressure and stock-corrections” more so than low-cost carriers JetBlue Airways Corp. and Southwest Airlines Co., which received neutral ratings.