This is from the Dow Jones report yesterday:

Airline shares slumped as the investment rating on UAL Corp.'s (UAUA) shares was cut by Goldman Sachs and Continental Airlines Inc. (CAL) reported it had more empty seats in June and will have second-quarter charges related to capacity cuts.

Continental shares recently traded down 7.9% at $9.17. UAL - owner of United Airlines - dropped 7.2%, while Delta Air Lines Inc. (DAL) declined 6.2%, AMR Corp. (AMR) - owner of American Airlines - fell 4.7% and Northwest Airlines Corp. (NWA) dropped 6%.

In a note about UAL, Goldman analysts expressed concerns that the airlines "will be unable to raise fares enough to offset the spike in jet fuel, especially given a lukewarm macroeconomic backdrop." Oil recently hovered around record highs, near $141 a barrel.

Goldman said it lowered its rating on UAL's shares to neutral from buy, based on concerns over high fuel prices and the fact that capacity cuts have not increased revenue per available seat-mile - a key airline measurement - "as we expected."

Meanwhile, Continental reported late Tuesday that the load factor, or percentage of seats filled, fell two percentage points on Continental flights to 84.1% with revenue per available seat-mile rising 3.5% to 4%.

When the company releases its second-quarter results on July 11, Continental expects to record charges from its planned capacity cuts later this year, as well as gains.
The company also plans to announce gains from investment and aircraft sales, the sale of aircraft and its investment in COPA and aircraft. Additional charges are expected in subsequent quarters

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