shares slid Wednesday after Goldman Sachs analyst Glenn Engel downgraded them to underperform from in line.

The analyst said in a research note that an oversupply of East Coast flights is causing Orlando, Fla.-based AirTran's unit revenue to fall faster than the industry's. (Goldman does and seeks to do business with companies covered in its research reports.)

"Florida represents 45% of AirTran's capacity," Engel wrote. "Second-half 2004 capacity to Florida is 12% higher than in 2003, and first-quarter 2005 capacity to Florida is 12% above 2004 levels and 27% higher than in 2003. Consequently, AirTran's unit revenue declines have averaged 10% in the second half of 2004, and their margins have dropped more than any other carrier under our coverage. ... We don't see any reason why AirTran's relative performance should improve in the first half of 2005."

In reaction, AirTran shares were off 27 cents, or 2.3%, to $11.45. The Amex Airline Index was up 0.4%.

The analyst added that AirTran shares have been buoyed by the potential for a 2005 liquidation of

US Airways


, which would eliminate some industry capacity.

Engel contends that potential is diminishing, however, as US Airways has been able to secure some labor concessions and strike a deal with

General Electric

(GE) - Get Report

giving the airline near-term liquidity.