A financial analyst downgraded shares of Delta Air Lines on Monday, saying Southwest Airlines' planned acquisition of AirTran Airways and accompanying entrance into the Atlanta market is a threat.
Raymond James analyst Duane Pfennigwerth wrote in a report Monday that the entry of Southwest into Atlanta with intentions to grow "represents a significant change in the competitive landscape." Atlanta-based Delta is the largest carrier in Atlanta, while AirTran is second-largest.
In the report downgrading Delta shares to "market perform" from "outperform," he added that Southwest is "a more serious threat than a retreating AirTran."
But not all analysts agree. A J.P. Morgan analyst wrote in a report last week that Delta is "not uniquely threatened," because cities Southwest may add service to from Atlanta that are not already served by AirTran represent less than 1 percent of Delta's overall business.
Hudson Securities analyst Daniel McKenzie wrote in a report last week that the news of the Southwest-AirTran deal is an "incremental negative" for Delta, but "not to the extent some fear."
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