UPDATE 1-Lehman downgrades U.S. airlines sector to neutral

(Adds details)

March 20 (Reuters) - Lehman Brothers downgraded the U.S.
airlines sector to "neutral" from "positive," saying the
market's acknowledgement of substantial earnings risk over the
next several months was likely to lead to choppy trading.

The brokerage said the energy markets had not projected any
relief and that the bigger risk to estimates was fuel prices,
not recession.

Lehman downgraded AirTran Holdings Inc (AAI.N: Quote, Profile, Research, Stock Buzz) and US
Airways Group Inc (LCC.N: Quote, Profile, Research, Stock Buzz) to "equal weight" from "overweight."

The brokerage also cut its price targets on several
airlines, including Continental Airlines Inc (CAL.N: Quote, Profile, Research, Stock Buzz), Delta
Airlines Inc (DAL.N: Quote, Profile, Research, Stock Buzz) and Northwest Airlines Corp (NWA.N: Quote, Profile, Research, Stock Buzz)

The following table lists Lehman's price target changes on
nine U.S. airlines. AIRLINES RIC
PRICE TARGET (in $)

New Old AirTran
Holdings Inc (AAI.N: Quote, Profile, Research, Stock Buzz) 7.50 12.00 Alaska Air Group
Inc (ALK.N: Quote, Profile, Research, Stock Buzz) 17.50 27.00 Continental Airlines Inc
(CAL.N: Quote, Profile, Research, Stock Buzz) 19.00 25.00 Delta Air Lines Inc (DAL.N: Quote, Profile, Research, Stock Buzz)
14.00 22.00 JetBlue Airways Corp (JBLU.O: Quote, Profile, Research, Stock Buzz) 7.00
10.00 Northwest Airlines Corp (NWA.N: Quote, Profile, Research, Stock Buzz) 11.00 18.00
Southwest Airlines Co (LUV.N: Quote, Profile, Research, Stock Buzz) 13.50 15.50 UAL Corp

(UAUA.O: Quote, Profile, Research, Stock Buzz) 23.00 38.00 US Airways Group Inc

(LCC.N: Quote, Profile, Research, Stock Buzz) 11.00 29.00
(Reporting by Biswarup Gooptu in Bangalore; Editing by Himani
Sarkar)