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. 

PlaneBusiness Banter Now Posted!

home-typewriter copy 1Good evening earthlings. This week’s “Summer Solstice” issue of PlaneBusiness Banter is now posted.

This week we talk a lot about American Airlines, as we attended the airline’s Leadership Conference in Dallas last week. You know I am a culture queen — one that believes strongly in the power of empowering employees through clear, consistent, and persistent communications from management.  Yes, well, the conference reinforced the management/employee relationship that we had seen at US Airways for years prior to the merger.  We weren’t surprised, but I think some American Airlines’ employees were. But by the end of the day, I think all of the 1500 or so folks in the room got it. And some walked away with a T-Shirt to prove it!

American was also out buying slots at Heathrow last week, it awarded the flying of 20 regional aircraft to Compass; and its passenger service agents received the “single carrier status” from the National Mediation Board. A representational election for the combined employee group will now be scheduled.

On Wall Street, airline stocks enjoyed a much better week than the week before — even though the price of jet fuel shot up. We talk a lot this week about what is going on in Iraq and how this could impact not only the price of jet fuel, but the economy as a whole. What price per barrel threshold do you think the U.S. economy can absorb before it is affected negatively?

We talk a lot about why we like the move from “miles based” frequent flyer mile programs to those based on “spend.” That’s the way it should be and we’ll tell you why it benefits both passenger and the airlines.

Delta Air Lines opened up its new museum to the public last week. Can’t wait to visit. The museum is the site of the first public fully-functioning flight simulator. (An old Boeing 737-200 to be exact!)

Oh, and yes, we also talk about that utterly confusing 8-K that United Airlines filed last Friday in which it talked about the termination of employment contracts with three top execs at the airline.

The wording of the filing was awful. People are antsy enough right now about possible changes at United. Add all of this to the fact the news of the filing was on a Friday, and it made for the perfect storm. I received over 100 emails from people concerned about it, wondering if indeed John Rainey, Jim Compton and Jeff Foland had been fired. No, they have not been fired. Their employment agreements were simply changed so that they would be in synch with other top execs at the company. 

Like I say, the wording was not the best. Even I was confused — and I read it about four or five times.

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

PlaneBusiness Banter Now Posted!

home-typewriter copy 1Good evening earthlings! It is yet another dark and….warm night here in the Metromess. The latest edition of PlaneBusinesss Banter is now posted.

This week we recap what was a very United Airlines-centric week last week. Not only did I fly on the airline’s trans-con p.s. product for the first time, but I also made my first flight on a Boeing 787 Dreamliner. Again, compliments of United. 

Oh, and I also attended the Tony Awards last Sunday night. Thanks to United. (That’s a whole ‘nother story!)

Finally, last Thursday, United Airlines’ SVP of Global Sales Dave Hilfman and I rocked the house at a joint Silicon Valley Business Travel Association/Bay Area Business Travel Association dinner meeting in San Francisco. I’m not sure who was the dog and who was the pony, but our yin/yang combination of sales hyperbole, financial analysis, and overall knowledge of the industry — peppered with a healthy dose of good humor and snarkiness — seemed to be well received. We’re thinking of taking our act on the road.

My thanks again to Ron Wagner, who extended the invite to the two of us to participate. It really was a heck of a lot of fun, the audience was large and asked a lot of questions, and I think everyone enjoyed themselves.

In other airline industry related news, it was a horrible week on Wall Street last week for the sector, after stocks were hit with two big jolts. One was Lufthansa’s profit warning for both this year and next. The second was the sharp rise in the price of crude oil — a result of political tensions surrounding the goings-on in Iraq.

Meanwhile, we also talk about the DOT April Air Travel Consumer Report, we get subscribers updated on the latest traffic and PRASM estimates from the usual suspects, and we also welcome a new contributing editor to PlaneBusiness Banter — Frank Arciuolo. This week Frank takes a look at the recent move by Delta to bring the development of its PSS system in-house, back from Travelport. 

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

PlaneBusiness Banter Is Now Posted!

home-typewriter copy 1Good evening everyone! It is, indeed, that time once again. This week’s issue of PlaneBusiness Banter is now posted!

This week we talk about a lot of things including the recent IATA AGM which was held in Doha, Qatar. We also talk about this week’s annual meeting of American Airlines, which, as has been the case for US Airways since the America West merger, has always been held in New York.

We also get into the nitty gritty as to why both employees of US Airways and American are grousing about changes to their travel benefits at the new American. 

In other news, it was a very strong week for airline stocks. In fact, the airline indexes easily outdistanced the rest of the market last week, even though both the S&P 500 and the DJIA both posted record highs during the week.

On the oil price front, OPEC will be meeting next week — but we see no reason to see the organization make any major changes to their current 30 million gallon-a-day target. Meanwhile crude oil supplies produced in North America continue to increase. (That is a good thing!)

We also talk a bit about JetBlue this week. Cowen and Co. analyst Helane Becker took a few institutional investors over to visit with the management team there last week. Two things struck us about her report on the meeting  – one, what was discussed and how far the airline may swing away from it previous business model and two — who was not at the meeting.

Looking at the big picture this week, we talk about some of the changes we’ve seen take place in the industry over the last 19 years that are good — and we tell you what the two biggest challenges are, we think, to the U.S. airline industry in the next few years.

Hint: Emirates, Qatar, Etihad. 

Hint number two: Spirit, Frontier, other potential ULCC models.

We will be traveling once again next week. First to New York. Then to San Francisco.

For those of you in the San Francisco area, I hope to see some of you at the combined meeting of the Bay Area Business Travel Association/Silicon Valley Business Travel Association this coming  Thursday, June 12.

I, along with United Airlines’ SVP of Global Marketing, Dave Hilfman, will be doing our best to entertain everyone in attendance. We look forward to seeing some of you there!

Meanwhile, I start my Summer Trans-Con Tour this week, as I fly United Airlines’ p.s. service from JFK to SFO.

Next up? American’s A321t product.

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

PlaneBusiness Banter Now Posted!

home-typewriter copy 1Good evening everyone! How was your Memorial Day weekend? Mine was spectacular! I hope you had a great start to summer as well.

This week we have somewhat of a hodge podge in PlaneBusiness Banter.

First, we have a great analysis this week by Brett Snyder, aka Cranky Flier. This week Brett, who moonlights as a contributing editor for PlaneBusiness, looks at American Airlines and how it has been performing out of its home turf — DFW — over the last several years. In a nutshell — not well. But he dives into the data and tells us just how poorly. In addition, he stumbled upon a little nugget of information about Spirit and one particular American route that we think subscribers will find particularly interesting.

Bottomline? There’s a lot of opportunity here if American can get its act together. (And given the track record of the new management team at American, we’re betting this is going to be the case.)

We also talk a bit more this week about the situation in Dulles, and give you an extensive review of how the combined market looks out of DCA and IAD for both American/US Airways and United Airlines. Oh, there are lots of interesting things to look at here.

Meanwhile, out in the Northwest, Delta Air Lines and Alaska Air Lines opened up yet another round of artillery fire last week with a series of announcements (within hours of each other) concerning new service out of Seattle.

I’m not so sure how this story is going to end. But in the meantime, it’s certainly interesting to watch.

Delta and Travelport announced their new deal last week — the one that will see Delta taking control of its PSS development and management from Travelport. But Travelport will continue to host the system. I’ll tell you why I think this is a good deal for both sides.

Ryanair announced its fiscal year and fourth quarter earnings last week. While results were down, on a year-over-year basis, analysts are apparently convinced that the airline will be successful in its easyJetrification process. Ahem.

All this, and much, much, more, including a great week for airline stocks, in this week’s issue of PlaneBusiness Banter. 

PlaneBusiness Banter Now Posted!

home-typewriter copy 1Good evening boys and girls! This week’s edition of PlaneBusiness Banter is now posted!

This week we take an in-depth look at the recent earnings calls from both Air Canada and WestJet. We also take a summary look at the recent earnings reported from the big three GDS players — Amadeus, Travelport, and Sabre. 

Bottomline — Sabre and Travelport still have too much debt on their balance sheets. Travelport said in comments after their earnings call that they may sell their piece of Orbitz. I think that would be a great idea, as I’m not sure an IPO would go over that well right now. I mean, look at how underwhelmed the Street was with the Sabre IPO.

As for Sabre, they bent over backwards to emphasize to investors as part of their call that they are working to reduce the level of debt on their balance sheet. But it’s still too high.

That’s the not-so-good part of leveraged buyouts.

As for the Air Canada/WestJet results, I can’t say I was that overwhelmed or impressed with much of anything I heard from either airline. Clearly the big loser here was Bombardier, as Air Canada announced it has decided not to replace its Embraer 190s. Most people had assumed they would place an order for the new Bombardier CSeries aircraft. Nope.

In other news, the City Manager of Dallas finally did what he should have done originally — given what the Department of Justice said he needed to do. As a result, Virgin America now has two gates at Love Field.

The new routes that Southwest will start flying after the Wright Amendment goes away in October seemed to have been leaked over the weekend. No updates on what flights or service may be modified or cut to accommodate the new service. We expect all of this to be announced Monday.

Meanwhile, last week was a fairly flat one for the airline sector, with stocks evenly split between winners and losers.

And what did you think about the news that the new ULCC-version of Frontier Airlines is taking over the Z gates (the ones that are easily accessible) at Dulles? We like it.

We talk about all of this and much, much, more in this week’s issue of PlaneBusiness Banter. 

 

PlaneBusiness Banter Now Posted!

home-typewriter copy 1Hello everyone. Another week. Another issue of PlaneBusiness Banter jammed packed with more in-depth earnings reports that you know what to do with. This week we have full 1Q14 reports on Allegiant Travel, Spirit Airlines, Republic Holdings and SkyWest. We also give you a brief rundown on the recent 1Q14 results reported by IAG, parent of British Airways; Lufthansa, and Air France-KLM.  Short and sweet? All three European airlines saw much improved numbers over those of 1Q13.

Next week we will wrap up 1Q14 earnings with full reports on WestJet and Air Canada. We’ll also take short looks at the earnings from Travelport, Amadeus and Sabre. Ah yes, the GDS folks.

But it’s not all RASM, CASM, and yield this week. Oh no.

I got to crawl around inside one of only four Airbus A350-900s XWB’s last week as the aircraft made its first appearance in the United States. What a beautiful airplane. We’ll even show you a cool close-up of the aircraft’s very sleek and oh-so-sexy curved wingtips. We really liked this airplane. A lot.

We’ll also get you up to date on the Virgin America-Southwest-Delta-DOJ-DOT-Dallas City Council-Love Field-Dallas City Manager Soap Opera. Short and sweet? There was still no decision as of late Friday night. If the city manager is smart, he will allow American to sublease the two gates involved to Virgin. That is the only airline the Department of Transportation has deemed “appropriate” for the gates per the DOJ’s American Airlines/US Airways merger agreement parameters.

If not — then I guess we can get ready for a long legal fight.

It was a strange week on Wall Street last week. While the Dow hit a new all-time high Friday, the Nasdaq continues to struggle. For airline stocks, it was not such a great week. We’ll go over the details.

Finally, as we discussed in last week’s issue, it does appear that JetBlue’s CEO Dave Barger is on his way out. A story that Bloomberg did last week seemed to confirm the Board has made the decision — we’ll give you the details on how we see all this finally playing out.

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