Holly

November 11, 2014

home-typewriter copy 1Hello earthlings! It has been one hell of a day here at the PlaneBusiness Worldwide Headquarters. American Airlines’ flight attendants voted down their TA this weekend, management at American issued its JCBA proposal to the pilots at the airline earlier today (with a twist), we have three in-depth earnings reports this week on SkyWest, Republic Holdings and Allegiant Travel, a comprehensive book review of Ted and Dan Reed’s new book on the American Airlines/US Airways merger, and we get you up to speed with what we were doing at Duke last week with the Travelport Ignite event, and what we were doing the week before when we visited with the folks at Delta Air Lines.  

All this and much, much, more, including the details on the Virgin America IPO.

It is one intense issue. That’s all I can say.

PlaneBusiness Banter subscribers can access the issue here. 

 

PlaneBusiness Banter Now Posted!

home-typewriter copy 1Hello everyone. The latest edition of PlaneBusiness Banter is now posted.

This week we bring you up to speed with in-depth earnings reviews of 3Q14 earnings reported by JetBlue, Spirit, and Hawaiian Airlines. We also have earnings summaries posted for SkyWest and Republic Holdings, both of which reported 3Q14 earnings last week.

Meanwhile yours truly was the guest of Delta Air Lines last week. I attended the Chairman’s Club Dinner Thursday night (which was spectacular) and spent all Friday meeting with execs at the airline. I’ll talk more about my time with the Widget folks in next week’s issue. My favorite part of the visit? Had too many to count. Sitting down and talking airlines with CEO Richard Anderson for almost an hour and a half was at the top of the list. But one of my other favorites was getting to sit in on the morning operations call with everyone calling in from stations hither and yon and everyone else in the room. No hiding. No “Oh you can’t say that because she’s here.” Nope. I heard it all. My thanks to Dave Holtz, VP Ops Control at Delta. You are the man.

But then there was the visit with the guys at Tech Ops, and well….it was just a fabulous visit. Like I said, I’ll be talking about it more in next week’s issue.

Tonight (Monday), I am at Duke University, where I am participating in the first Travelport Ignite discussion conference for thought leaders in the travel industry. The conference kicked off tonight with a fabulous interview of Bob Crandall, former CEO of American Airlines by the Dean of the Fuqua School of Business, William Boulding. The event continues tomorrow at the Fuqua School of Business.

It was a great week last week for airline stocks. We tell you who the big winners were.

And of course it was also Halloween. We have a few photographs of the antics from Dallas last week — both from Southwest, and this year of course, American Airlines. Yep, there is definitely something different in the air.

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

 

PlaneBusiness Banter Now Posted!

home-typewriter copy 1What is another word for….exhaustion? The latest edition of PlaneBusiness Banter, which I think probably runs at least 80 pages printed out — is now posted.

Yes, it is earnings time. That lovely time of year that rolls around every three months. This week we have in-depth looks at the recent earnings results from United Airlines, American Airlines, Alaska Air Group and Southwest Airlines. 

Short and sweet? No real big surprises, although Southwest and United spooked some investors with their less than expected PRASM guidance. But both airlines posted strong 3Q14 numbers.

As for American Airlines, the airline continues to post very strong margins and nice fat profits — while still very much in the early stages of its merger. Excellent job. Give these guys another year and who knows how much money they will be making.

Alaska Air Group? These guys just will not be stopped. Not by Virgin America. Not by Allegiant. And not, it appears,  by Delta Air Lines either.  Alaska posted an excellent quarter with nothing short of mind-blowing margins — while it continues to fight the increase in capacity in its home turf from Delta. 

Yes, in case you missed that movie a while back — we’re pretty certain the plotline went something like this. Delta says to Alaska, “Stop codesharing with American Airlines or we’ll huff and we’ll puff and we’ll blow your house down.”

Alaska responded, as best we can tell by essentially saying, “Bring it on.”

Fun to watch.

In addition to all the earnings fun this week, our curiosity was piqued by some comments that Scott Hamilton with the Leeham Group made this week. Those comments? Instead of buying new Boeing or Airbus widebodies, could Delta Air Lines maybe purchase some pre-owned Boeing 777-200ERs? Interesting thing to ponder. He might very well be right. That RFP is still hanging, and in Delta’s 3Q14 earnings call last week, CEO Richard Anderson discussed the RRP and talked about ownership costs, and this and that and ….the upshot is….. I wouldn’t be surprised to see Delta looking at some used widebodied aircraft. Certainly wouldn’t be the first time.

We presented at the Business Travel News “Travel Trends and Forecast” event last week in Chicago. My friends at United Airlines should be happy. Not only did I have two excellent flights on the airline last week, but there was a very palpable uptick in the positive feedback about the airline from the corporate travel manager group to whom I spoke. Much better than a year ago. The airline still needs to become more consistent in its operations  – but there is progress being made.

Fantastic week last week for the airline sector. We’ll update everyone on who did what.

All this, and lots and lots and lots more — in this week’s edition of PlaneBusiness Banter

PlaneBusiness Banter Now Posted!

home-typewriter copy 1This week’s edition of PlaneBusiness Banter is now posted.

Delta Air Lines kicked off the 3Q14 earnings season last week. The airline reported in-line earnings — beating analyst consensus by a couple of pennies.

Net income was $357 million or $0.42. Excluding items, net income rocketed to just over $1 billion, or $1.20. The analyst consensus forecast had been for EPS of $1.18, so the airline came in pretty much in line.

The airline disclosed no real surprises in its earnings call, but there were some fireworks when JP Morgan analyst Jamie Baker pushed CEO Richard Anderson on the subject of capacity.

If that wasn’t enough, one of the industry’s most energetic analysts, and the analyst who recently downgraded shares of Delta Air Lines, Hunter Keay with Wolfe Research, was not on the call. We’ll fill you in on why that was the case.

In other news, airline stocks rebounded last week from their Ebola sell-off madness, we get you updated on the craziness that is surrounding the tentative agreement vote for the American Airlines flight attendants, there was a recent change at the top at ExpressJet, and much, much more.

All in this week’s edition of PlaneBusiness Banter

 

 

PlaneBusiness Banter Now Posted!

home-typewriter copy 1This week’s edition of PlaneBusiness Banter is now posted.

This week we talk a lot about Ebola. Not hysterically. Rationally.

Unfortunately we seem to be the exception.

Last week, heightened fears over potential demand destruction in the airline industry, as a result of fears over the death of one person in Dallas sent shares of airline stocks plummeting like rocks. With the news that a nurse who attended to the man who died last week had tested positive for Ebola breaking over the weekend, things didn’t get much better for airlines Monday either.

Meanwhile, the U.S. is watching as the price of crude oil and the price of jet fuel continues to drop to multi-year lows, and airlines continue to report good guidance, generally speaking, for 3Q14 numbers. Both of these should be resulting in positive moves, not negative, for airline stocks.

But last week traders were trading on headlines. Not fundamentals.

Monday it was the same story.

In other news, we’ll tell you what we found interesting at this year’s The BeatLive Conference which was held last week in New Orleans. Yours truly presented the look at the airline industry for the corporate travel audience, while Kevin Krone, SVP of Marketing at Southwest Airlines, was on “The Hot Seat” this year. Kevin did a great job — and while he said that the airline is now about to announce an upsell produce anytime soon — it is going to announce some “onboard improvements” in the not-too-distant future.

No other hints were given.

We update you on the DOT Air Consumer Travel Numbers for August; we get you up to speed on the new approach A4A looks like it is going to take as it hits Congress up once again for a comprehensive FAA reauthorization funding bill, we give our thumbs up to the JetBlue decision to hire former Wall Street analyst Kevin Crissey as its new director of IR, we tell you what airline analyst took the First Team analyst spot in the 2014 Institutional Investor surveys, and oh, so much more.

All in this week’s edition of PlaneBusiness Banter. 

PlaneBusiness Banter Now Posted!

home-typewriter copy 1This week’s edition of PlaneBusiness Banter is now posted! Last week was a wild one in the airline industry between fears associated with the first case of Ebola diagnosed in the United States, weather, continued ATC issues in Chicago, end of quarter stock performance, and fireworks down in Dallas, where the Dallas City Council told Delta Air Lines it had two weeks to vacate Love Field.

Say what? 

We’ll get you updated on who has apparently done what to whom to get us to this point and what will probably come next.  (Hint….lawsuit.)

There were other legal wranglings last week including a suit that now will go back to a lower court involving some unhappy Spirit flyers; and American’s request to the DOT to transfer slots it awarded to Delta for its Haneda routes — to American. We’ll tell you why American thinks it should be allowed to  move the service to LAX, and fly a daily flight to Japan.

We update you on the latest concerning the flight attendant TA voting at American, and we also give you our take on why pilot negotiations seem to be falling behind the original 30-day timetable at American. Hint: We don’t disagree with what we hear are the reasons.

Southwest Airlines took the top stock performance honors for the third quarter. We tell you which airlines did well, and which ones did not — as we go down the results for the third quarter.

Speaking of, 3Q14 earnings are right around the corner. We give you the dates you’ll not want to miss. Essentially most of the big players (with the exception of Delta, which reports on Oct. 16) will report the following week. Oct. 22-23 are going to be very busy days.

El Al seems to have a problem on some of its flights — orthodox Jewish men who refuse to sit next to …gasp….women! Meanwhile, United Airlines announced it has hired its third CIO since the merger of United and Continental. Will the third hire be the charm?

The biggest news from last week — the continued decline in the price of oil and jet fuel.

The importance of this cannot be underestimated in terms of the industry and lower costs.

We’ll tell you more about why we think this is not a short term thing.

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

 

 

PlaneBusiness Banter Now Posted!

home-typewriter copy 1A great Monday afternoon to everyone! How are you? The latest edition of PlaneBusiness Banter is now posted!

This week we have a busy issue as we talk about the impact of the FAA fire at its Aurora Center outside of Chicago, (we also give you our take in a column about just why the FAA is NOT the problem here — it’s a much broader issue involving a total lack of recognition of how important aviation and transportation is to our economic well-being in the U.S.)

The FAA is simply the most convenient whipping boy.

Let’s move up a level, shall we? Let’s talk about funding. Or better yet, lack of.

 

We also discuss the fascinating back and forth that occurred last week — after Delta announced across the board raises for its employees and an advance on their 2014 profit sharing benefit.

While we acknowledge that this is great news for Delta employees — this just wasn’t a case of Richard Anderson donning a Santa hat two months early.

There were a couple of things going on here, including the IAM’s current card campaign going on for the Delta flight attendant group, and American Airlines’ tentative agreement with its flight attendant group — which was just about to be sent out the door — when the employee memo at Delta went viral.

That TA had given flight attendants at American “industry leading” numbers. Well, after the announcement from Richard, that was no longer the case.

The result? The APFA went back to management at American and got…more money.

Meanwhile, if we’re strictly talking pay rates, the flight attendants at Southwest Airlines still top everyone.

Oh, let’s see. We have new A380s arriving at DFW this week, we have Emirates apparently putting the screws to Airbus to get them to re-engine the A380, we have another new livery to show you (and this one is gorgeous) and oh yes, we talk about Sean Menke’s new gig at Hawaiian Airlines.

As for stocks, it was a lousy week for airline stocks last week. Meanwhile, analysts are busy tuning up their 3Q14 estimates, as this quarter comes to a close.

Oh, and yes, Wolfe Research analyst Hunter Keay downgraded shares of Delta Air Lines last week. Not unexpected. We agree with the reasons he gave. We go over these in this week’s issue too.

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

 

PlaneBusiness Banter Now Posted!

home-typewriter copy 1Good evening everyone. The latest issue of PlaneBusiness Banter is now posted.

We are a day late this week. (But not a dollar short!) I thank everyone for their patience. Yours truly was part of a fabulous event on Sunday in Philadelphia. I was part of a case study presentation given to the Arthur Page Society – a group comprised of top level executives and corporate communications officers of Fortune 500 companies. The topic? The role communications played in the American Airlines/US Airways merger.

Leading the presentation was American Airlines CEO Doug Parker and EVP of People and Communications Elise Eberwein. In addition to myself, the panel included Laura Glading, President of the Association of Professional Flight Attendants; Scott Shankland, former national officer with the Allied Pilots Association; Gregg Polle, Managing Director, Moelis & Co.; Paul Denis, Partner, Dechert LLP; Hilary Rosen, Managing Director, SKDKnickerbocker, and Kelly Sullivan, Partner, Joele Frank.

It was a great experience. In addition, it was striking to sit back and reflect on just exactly was accomplished. It’s a deal that I doubt will never be repeated in this industry. Or maybe any other industry.  By that I mean — a smaller company successfully pulled off a hostile takeover of a larger company — while that larger company was in bankruptcy protection.

What was the “secret sauce”? As I talk about in this week’s issue, it wasn’t the price. In fact the deal was not “priced” until very late in the process.

No, it was — communication. Intense, constant, coordinated and strategic communication.

Yep. It was a cool way to spend a Sunday.

In other news, it was a blockbuster week for union news last week, as we had a TA announced with the flight attendants at American Airlines; the APA was certified by the NMB as the bargaining agent for the pilot group (bye bye USAPA); the customer service workers at both US Airways and American will now be represented by the same joint representation that was in place at US Airways — the Teamsters and the CWA; Piedmont pilots approved a new contract; and United Airlines rolled out a very impressive “Early Out” offer for flight attendants that pays out as much as $100K. (Depending on years of service.)

Whew!

On top of all this, I was in Washington last week, where I moderated a panel at Airlines for America’s Aviation Summit. Great experience. Great list of speakers throughout the day. I give you some of the better quotes from the sessions in this week’s issue. Oh and I’ll also introduce you to the man who controls more shares of stock in U.S. airlines than any other investor.

Yep. True.

All this and much, much, more in this week’s edition of PlaneBusiness Banter!

 

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.