Dahlman Rose Downgrades SkyWest (SKYW) to Sell; The Delta Double-Squeeze (Margin & Fleet Retirement)

Dahlman Rose downgraded SkyWest (NASDAQ: SKYW) from Hold to Sell with a price target of $5.00.

Analyst, Helane Becker, said, "SkyWest is the largest operator of 50-seat regional jets, with 268 aircraft at the end of 1Q12. Delta Air Lines (NYSE: DAL) represents 35% of the company's fleet at the end of 1Q12. Delta announced it will retire a significant portion of its 50-seat operation. We expect Delta will look to remove a large portion of SkyWest 50-seat operation is favor of larger 70-seat aircraft. Delta's aircraft retirement and replacement is likely to put downward pressure on SkyWest earnings."

Becker also notes SKYW, as a regional airline will have 'margin squeeze' issues similar to Republic (Nasdaq: RJET)

For an analyst ratings summary and ratings history on SkyWest click here. For more ratings news on SkyWest click here.

Shares of SkyWest closed at $7.00 yesterday.

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