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Airline stocks fell Monday after Goldman Sachs analyst Glenn Engel lowered his 1999 earnings estimates and cut ratings, noting that air travel demand is slowing just as airlines are adding more planes.
Shares of America West Holdings Corp. led the decline, falling $1.88, or 11.5%, to close at $14.44. American Airlines parent AMR Corp. fell $4.25, or 6.4%, to close at $62.50 while Continental Airlines Inc. fell $2.56, or 6%, to close at $40.19, and US Airways Group Inc. dropped $2.44, or 4.6%, to close at $50.56.
Engel cut earnings estimates for next year by an average of 15% and noted that unless economic growth picks up, airline earnings could fall farther in 2000.
The analyst ranked all airline shares except Delta “market perform.” He said he continues to recommend buying Delta because the airline is in the midst of cutting costs and improving productivity.
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