Holly

September 15, 2014

 

home-typewriter copy 1Hi everyone. A very tired group of die hards here this evening/morning at the Worldwide Headquarters. Going to be short and sweet as I need to catch a plane in about six hours. How short and sweet? This week’s issue of PlaneBusiness Banter is now posted. There ya go!

PlaneBusiness Banter Now Posted!

home-typewriter copy 1Good evening everyone! We’re baaack!

Yes, vacation is over, and it’s time to get back to work. Or at least that is what I kept telling myself last week. As a result, this week’s issue of PlaneBusiness Banter is now posted.

This is one of our “catch-up” issues. It’s rather difficult to compress three weeks into one issue, but I tried to talk about those topics we thought were most noteworthy. Or at least mention them!

On the stock side, August was a great month for airline stocks. The dog days of August are often times not that friendly to the things with wings, but that was not the case this  year. The only negative about August was the sharp decline in jet fuel inventories that occurred right before Labor Day in the Northeast. The shortage caused jet fuel prices to jump more than 6% that week, as inventories fell to record lows.

All is now back to normal on that front as a number of  tankers have been able to get into New York Harbor and offload their cargo.

In other news, Southwest Airlines and Frontier Airlines will both roll out new liveries this week. Pics of both were leaked over the weekend. We posted the Southwest Airlines livery last night. Here is a shot of the new Frontier livery. The green livery with the feathered “F” harkens back to previous branding at the airline — years ago.

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In other news, we talk a bit this week about the union activity over at American, get you updated on that, although I did not get into detail about the decision by American to pull flying from Envoy and give it to PSA. A number of the folks we wanted to talk to just simply weren’t able to be tracked down before we published. I’ll revisit this move by the airline this week.

Speaking of this coming week, look for analysts to be watching the traffic reports issued by the airlines very carefully this week. Delta reported less than robust PRASM numbers for August last week, and analysts will be watching everyone else to see if it is a one-off for Delta only, or if the rest of the industry is showing any signs of weakness as well.

Tomorrow morning, I am off to the Southwest Airlines Media Day. More on that in next week’s issue.

Have a great week everyone. Talk to you again next week.

First Shot of New Southwest Airlines (NYSE:LUV) Livery

Nothing like coming back from vacation with a bang. That’s what I say. Yes, I am back from vacation and this week’s PlaneBusiness Banter will be posted tomorrow. (Sunday.) In the meantime, look what a little bird just dropped into my hand. A photo of what I believe is the new Southwest Airlines livery that will be unveiled Monday morning at the airline’s headquarters as part of its Media Day event. (Yes, I will be there.) As for where this came from, I’ll never tell. But don’t say I never do anything for you guys. Southwest

PlaneBusiness Banter Is Now Posted!

home-typewriter copy 1Hello everyone. Our final issue of PlaneBusiness Banter for the summer has now been posted. This week we take an in-depth look at 2Q14 earnings results from Hawaiian Airlines, Allegiant, and Spirit Airlines. We also give you a summary of the recent earnings released by Air Canada, Republic Holdings, and SkyWest. 

As we had reported earlier this month in PBB, Republic did confirm in its earnings call last week that Chicken Taco is about to bite the big chicken leg in the sky. Republic is consolidating from three operating certificates down to two — so the existing aircraft that are currently flown by Chautauqua are being moved to the Shuttle America operating certificate.

So…it won’t be too much longer before we won’t have Chicken Taco to kick around anymore.

Meanwhile, up in Canada, we have to agree with one analyst who wonders if Air Canada really knows what the heck it’s doing with its rouge product. We wondered before they rolled it out, we wondered after they rolled it out, and we wonder even more now.  If you are going to do an alternative “low-fare” airline, then you’d better damn well offer lower fares. Like 30% to 40% lower.

Meanwhile on the international front, Etihad finally brought out the checkbook and antied up a nice chunk of change for a 49% interest in Alitalia. James Hogan, CEO of Etihad says that Alitalia should be “the sexiest airline in Europe.” Yes, that is what he said.

This equity investment creates some strange bedfellows — as Alitalia is still a member of the SkyTeam alliance, and Air France still owns a small piece of the airline.

We wonder what Delta Air Lines thinks about all this…..yes wondering minds want to know.

It was a rather so-so week for airline stocks, although Copa took a beating. The airline posted better than expected numbers for 2Q14, but guidance was not the best.

The DOT issued its June Air Travel Consumer Report last week. The numbers continue to reinforce the problem associated with mergers — they wreak havoc on operational metrics.

And I’m talking about all three of them — not just United/Continental. Southwest/AirTran continues to struggle, and American continues to drag down results for US Airways. 

Finally, we would be less than honest if we did not say that it was a hard week at the Worldwide Headquarters this last week. We lost a very good friend, as did many who worked at America West, US Airways, and eventually, American Airlines. That man was Bill McGlashen.

They don’t make men like Bill too often. We’ll miss his goofy sense of humor, his intelligence, his friendship, and his smile. Bill was only 55 and in excellent health when he was hospitalized with pneumonia roughly two weeks ago. None of us who knew him still believe he’s gone.

So — out last issue for August is a mix of all kinds of things this week.

Have a great rest of the summer everyone. We’ll talk to you again after Labor Day.

 

 

PlaneBusiness Banter is Now Posted!

home-typewriter copy 1This week’s issue of PlaneBusiness Banter is now posted. This week we take an in-depth look at the recent earnings reported by Southwest Airlines, JetBlue, and Alaska Air Group. We also have summarized takes at Ryanair, IAG, and Lufthansa. Finally, we have earnings summaries posted for Spirit and WestJet this week.

A bit of comment on the foreign flyers in the group – IAG, parent of British Airways, Vueling and Iberia, clearly took the top spot this quarter for the major European carriers. Meanwhile, Lufthansa, which had already pre-warned on earnings in June, reported numbers that were far worse. This, after Air France-KLM didn’t wow anyone with their 2Q14 earning last month either.

Another winner across the pond? Ryanair, which easily beat expectations for the quarter.

On this side of the pond we talk about Southwest Airlines and its aspirations, we muse about how we believe Alaska Airlines holds the bulk of the leverage in the Battle for Seattle with Delta Air Lines, and we talk about JetBlue and its transitional year.

We also take a short look at the recent earnings results reported by Spirit and WestJet. 

Which reminds me. Were you aware that WestJet plans to acquire wide-bodied 767s — which it intends to use to fly to Hawaii? Didn’t think so.

Switching gears, last week we attended the Global Business Travel Association (GBTA) conference out in Los Angeles. Just me and 6,000 of our closest friends.

We’ll give you the scoop on what the three major U.S airline CEOs — Richard Anderson, Doug Parker, and Jeff Smisek, had to say at the conference, along with a lot more.

As for airline stocks last week, it was a bad week — just as it was for the markets in general. Goat of the Week honors went to shares of SkyWest. 

All that — and more — this week in PlaneBusiness Banter. 

PlaneBusiness Banter Now Posted!

home-typewriter copy 1Good evening everyone. This week’s issue of PlaneBusiness Banter is now posted.

Last week the bulk of the major U.S. airlines we follow reported 2Q14 earnings. We will have a few stragglers come in this week and next, but in terms of the big boys, all of them rolled out the numbers. In this week’s issue we’ll take a long look at the results reported by American, Delta, and United Airlines. 

Which one of these three was the biggest surprise? United Airlines. In terms of the airline’s earnings call, I thought it was the best since the merger. In addition, as we told PlaneBusiness Banter subscribers more than a month ago, we continue to hear nothing but good things about Greg Hart, the COO at United. This quarter did nothing to change that opinion, and we were glad to hear him on the airline’s earnings call.

As for Delta Air Lines, the airline produced yet another strong quarter, showing once again why it indeed at the top of the heap. Excellent job by the guys in Atlanta.

American Airlines also rolled out a very strong quarter — particularly so considering the airline is in the middle of a huge merger integration.  If you are wondering why shares of AAL took a bit of a dip last week, it is because it’s RASM guidance was not as strong as some analysts had forecast. The big culprit here — the airline’s situation with Venezuela. Not only does Venezuela owe the airline hundreds of millions of dollars, but the airline will not see revenues impacted going forward as a result of its substantial reduction in service to Venezuela.

Short-term problem.

Long-term? The airline continues to look good. The airline also surprised investors with news of a stock buy back and a dividend payment. (United also announced a stock buy-back program.)

All this, and much, much, more in this week’s mega-earnings issue of PlaneBusiness Banter! 

 

PlaneBusiness Banter Now Posted!

home-typewriter copy 1Hello earthlings. It’s that time again. Time for the latest issue of PlaneBusiness Banter.

Not going to talk too long this evening, as frankly, it was a rather depressing issue to write this week as a result of Malaysia Airlines Flight 17. We talk a lot about the flight in this week’s issue, and about the travesty of the fact that as of this posting not one international aviation authority or investigator has been allowed at the scene of the crash in Ukraine.

As I said, it’s a rather depressing situation.

But that’s not all we talk about this week. We have the usual update from Wall Street, we prepare you for the 2Q14 earnings onslaught that begins this week, and we have a great Cranky Analysis column this week that takes a look at the airline everyone loves to hate — except investors. That airline is, of course, Spirit Airlines. PlaneBusiness Contributing Editor Brett Snyder digs in the data this week and comes up with some interesting stuff (as he always does) including the answer to the question of whether Spirit merely “stimulates” a market when it goes into it, or whether it steals market share from other airlines. (I’ll give you a hint. It depends on the airline.)

All this, and more, in this week’s issue of PlaneBusiness Banter. 

PlaneBusiness Banter Now Posted!

home-typewriter copy 1Good evening everyone! This week’s issue of PlaneBusiness Banter is now posted!

This week we are talking about everything from Spirit’s “Hate” campaign to the Frontier Airlines’ Captain who ordered pizza for everyone on his diverted flight. But in-between we talk about  a lot of serious stuff too.

After Delta’s announcement that it had seen a bit of weakness on the international front the week before, and the thrashing that Wall Street did to the sector as a result, all eyes were on the rest of the “Big Four” last week as they issued traffic updates, RASM updates, and in some cases, margin estimate updates.

So what did we learn?

We learned that Delta Air Lines and American Airlines will post the best margins for 2Q14. We learned that while United Airlines did forecast a better than expected RASM performance for 2Q14, the airline will still lag both of its major peers in terms of RASM performance and margin performance.

Oh, and if the revenue brains at United are still trying to digest Imperial Capital analyst Bob McAdoo’s recent long research report in which he made the case why United should shut down its hub at IAD, last week he came out with another long look at United and its revenue woes. But this time he focused on the West Coast. We’ll tell you what he thinks the airline should be doing there and how much money they are losing because they aren’t.

But that all of this didn’t matter to Wall Street investors, as they jumped back into shares of United Airlines last week with a vengeance after the airline upped its previous RASM guidance. The stock ended the week up 15%.

Meanwhile, for all the aircraft geeks out there, the Farnborough International Airshow opened Sunday. Lots of news already from there, including a confirmation of a huge Boeing 777X order with Emirates; a much-needed Bombardier CSeries order from a British leasing firm; and Boeing confirmed Sunday that it is going to adapt the 737-800 MAX so that it can have a maximum seating capacity of 200.

Whew.  We figure this means that big Ryanair’s order can’t be that far behind.

The move to appeal to the ULCC crowd is not unexpected from Boeing. Airbus had already announced it June increases in maximum capacity seating for both the A320 and the A321.

But this is just the tip of the iceberg. We talk about Norwegian, and their new service to New York; we talk about the pros and cons of why Norwegian should be allowed to operate its new subsidiary in the U.S.; we talk about the latest DOT Air Travel Consumer numbers (hint: Delta continues to lead the big four; Southwest continues to lag; and Alaska Airlines had another great month) and much, much more.

All in this week’s issue of PlaneBusiness Banter!

PlaneBusiness Banter Now Posted!

home-typewriter copy 1Good morning everyone. This week’s post-holiday week edition of PlaneBusiness Banter is now posted!

This week we have a long follow-up interview with Laura Glading, President of the Association of Professional Flight Attendants. We first interviewed Laura last year, before the merger between American Airlines and US Airways had been completed. This year we talk to her about the events of last year, including her DOJ deposition, negotiations, Tom Horton and trips to Sephora.

Meanwhile, we also sat down last week and discussed the state of things between the pilot groups at American Airlines with Allied Pilots Association VP Neil Roghair. We’ll tell you how he sees both the seniority negotiations and the contract negotiations playing out at American. 

Speaking of American I am off this morning to attend the ground breaking ceremony for the new Robert W. Baker Integrated Operations Center at American. That’s right. The new facility will be named after one of our most favorite people we ever had the pleasure to work with in the industry, the late Bob Baker. Classy thing to do on the part of American. We like it.  We understand that it was Doug Parker himself who made the decision.

We are not surprised.

We also talk about why airline stocks got smacked around last week (a typical overreaction on the part of Wall Street to what were actually in-line RASM estimates from Delta for June) and we talk a bit about the situation down in Mexico as two LCCs fight it out for domestic dominance.

Airbus rolled out its new A320neo this week. Yes, Farnborough is right around the corner remember. Meanwhile Boeing lost six 737 fuselages last week after a train derailed in Montana. Three of the unfinished birds ended up in the river, while another one was apparently mangled closer to the tracks. As of today Boeing is still trying to figure out how to retrieve them.

Will Malaysia Airlines go private in an attempt to survive? Will JetBlue be the next airline to move to widebodies now that b has confirmed it will add them late in 2015?

All this and more in this week’s issue of PlaneBusiness Banter. 

 

 

PlaneBusiness Banter Now Posted!

home-typewriter copy 1Good evening everyone. This week’s issue of PlaneBusiness Banter is now posted.

This week we are talking about a lot of things. First out of the chute – Imperial Capital analyst Bob McAdoo’s dead-on research report last week on United Airlines. While Bob downgraded shares of United, the real story was his in-depth report on the airline, and what he feels are the achilles heels. One — Dulles. Two — the airline’s continued (and at this point rather seemingly obstinate) reliance on 50-seat regional jets.

Yes, the two do go together. Close Dulles and you can take a lot of that feed and move it over to Newark. But only if you upgauge — a process, I might add, that both Delta Air Lines, and US Airways (now American) have been doing for years.

Why hasn’t United already moved to upgauge operations? You answer that and you get the prize for the week.

In other news, we talk about Delta Air Lines’ CEO Richard Anderson and his comments in Washington re: the Ex-Im Bank. Only problem? We really don’t think Richard wants the bank to go away completely. He just doesn’t want them to finance wide-bodied aircraft for foreign airlines that are state-owned. But some right-wing Conservatives in Washington do want to do away with the bank completely.

Stay tuned.

The co-founder of Southwest Airlines, Rollin King, passed away last week in Dallas. He was 83. We had hoped, as had others, that Rollin would one day pen his take on the early days of Southwest. He never did. This only makes us that much more motivated to press ex-Chairman and CEO Herb Kelleher to do so.

This week our contributing editor Frank Arciuolo talks to us about the concept of the GDS, and what it is and what it isn’t. And what it had best morph into — otherwise the airlines are going to come up with a far better alternative.

The week was a fairly uneventful one on the Street, with about half the stocks we track posting a gain and about half posting a loss. WestJet led the gainers, while United took “Goat of the Week” honors.

All this, and much, more more, including the latest titillating gossip from both Boeing and Airbus, in this week’s edition of PlaneBusiness Banter.