PlaneBuzz

It's Sunday. New Year's Eve. Do you have your list of resolutions for 2007 edited and posted on your computer monitor?

I thought not.

We took a few days off from following the antics of the airline biz last week. Hope all of you also had a chance to enjoy a few days over the holiday season enjoying friends, family, and just generally recharge the batteries. (And I'm not talking about the ones that power all those electronic goodies that Santa left behind this year for many of us.)

If you're out and about tonight, be careful. I'm always a "stay-at-home" New Years person myself. Way too many "amateur drunks" out on the road for me.

But whether you venture out and party hardy, or stay at home with a nice cold bottle of something sparkling, have a good one no matter how you choose to celebrate.

Talk to you again next year!

Posted by Holly at 3:19 PM | Permalink | Comments (0)

Our take on the Virgin America DOT application has been the same for the last year. That take? That the airline's application was not going to be approved by the DOT.

Today, after weeks of rumblings that this is what was going to happen, the DOT finally made it official.

Here's the DOT release:

VIRGIN AMERICA MUST GIVE UP INTERNATIONAL OWNERSHIP AND CONTROL TO MEET CITIZENSHIP TEST FOR U.S. CARRIER STATUS, ACCORDING TO TENTATIVE FINDING

Virgin America would have to revise its ownership, corporate structure and associated agreements to be 75 percent owned and actually controlled by U.S. citizens before it can receive an operating certificate, the U.S. Department of Transportation (DOT) said today in tentatively denying the company's application.

Under the Federal Aviation Act, to be certificated as a U.S. airline, a company must first show that it is actually controlled by U.S. citizens, that the president and two-thirds of the board of directors are U.S. citizens, and that at least 75 percent of the voting interest is owned or controlled by U.S. citizens. The Department recently withdrew a proposed rule that would have amended its interpretation of the statute's "actual control" requirement so as to allow additional foreign investment.

In its show-cause order, the Department tentatively concludes that Virgin America's close relationship with the U.K.-based Virgin Group indicates that the carrier is not under the actual control of U.S. citizens. The order cites the Virgin Group's and its executives‚ pervasive involvement in the creation of Virgin America, the funding Virgin Group provided to the carrier, various interlocking financial agreements, and the Virgin Group's ability to influence decisions of the carrier's board.

The Department also said that the restrictive name-brand licensing agreement between Virgin Group and the airline impedes the carrier's independent decision-making authority. However, the Department's tentative decision reflects its review of the specific terms of the Virgin America licensing agreement, and DOT emphasized that properly structured licensing or franchise agreements between U.S. and international carriers are now, and will continue to be, permissible.

The Department also tentatively found that less than the required 75 percent of voting interest in Virgin America is owned or controlled by U.S. citizens, with most of its voting equity held by companies that are majority-owned by non-U.S. citizens.

In order for an application to be granted, Virgin America would have to demonstrate that it is independent of the Virgin Group and other non-U.S. citizens, and that at least 75 percent of its voting equity is held by U.S. citizens.

On July 12 the Department found the company's application to be complete. DOT's tentative decision follows an extensive review of Virgin's heavily contested submissions and public comments.

Virgin America may file an objection to the proposed decision within 14 calendar days. Answers to objections will be due seven business days afterward. The show-cause order and other documents in the case may be found on the Internet at http://dms.dot.gov <http://dms.dot.gov/> , docket OST-2005-23307.

Our friend Steve Lott over at Aviation Daily advised today that we all need to look at the show cause order, especially the appendix at the end, where the DOT tries to "sketch out" the ownership structure. Steve said it is hilarious. It is. And I think it gives us a pretty good idea of the impossible battle Virgin has in trying to convince the DOT of its ownership structure. Or rather, what it wants the DOT to think is its ownership structure.

http://dmses.dot.gov/docimages/pdf99/434510_web.pdf

Does this mean Virgin America is really dead? No, as the DOT comments said, objections can be filed in the next 14 days. After that, answers to objections are due within 7 days.

But I don't see the airline being approved. Not enough is going to change between now and then. There are way too many attachments to the mother ship here. Always have been.

Anyone want a brand new headquarters? How 'bout some nice never-flown Airbus aircraft? I know. How about a bank account in the Cayman Islands?

More on this mess in next week's PlaneBusiness Banter.

Posted by Holly at 5:44 PM | Permalink | Comments (1)

Just wondering.

Hard to believe that it's already December 27. Every year it seems to me the earth's orbit begins to speed up around Labor Day, and by the time Christmas is here -- we're all movin' along at warp speed.

It just seems that I never have enough time to finish what I need to do, I never have enough time to enjoy the company of those I'd like to visit with a little longer (then again those nights with obnoxious relatives can go on forever), never have enough time to simply relax and listen to Christmas music -- enjoying the downtime.

Before you know it, January 2 rolls around and the world automatically goes right back into "normal" mode. Crank it up!

Anyone else feel that way? Maybe it's just my warped brain.

Then again, if I had spent four or five days at Denver International Airport this Christmas season, I think maybe I'd be happy that January was just around the corner.

Speaking of -- I read this morning that there are still thousands of passenger bags out at DIA, bags that never made it to their destination during the Christmas blizzard event. Not particularly good news anytime, but especially not considering weather forecasters are now predicting that Denver may be looking at another storm in the next couple of days.

This could be another doozy," Klaus Wolter of the National Oceanic and Atmospheric Administration in Boulder said of the impending storm in USA Today this morning. "Right now we're in an amazingly active storm track."

Airport officials are scheduled to go on full "snow alert" later today -- the storm is expected to roll in on Thursday and current forecasts call for the storm to drop between 8-10 inches before it's over.

Posted by Holly at 1:37 PM | Permalink | Comments (0)

Looks like American Airlines has a new suitor. Just what this suitor wants is not clear. What is clear is who they are and what they have been involved with in the past.

This week it as disclosed that the FL Group now holds more than a 6% stake in the U.S. carrier.

For those not familiar with this group, this is the same entity that began to buy up shares in European low-cost carrier easyJet in 2005.

In February 2006 FL Group announced plans to list its subsidiary Icelandair Group on the Iceland Stock Exchange.

FL sold its 16.9% stake in easyJet in April 2006 for $427 million, returning a profit of $184 million on its investment. FL had first invested in easyJet in October 2004, taking an 8.4% share. The company continued to increase increase this stake over the course of 2005.

In October 2006 FL Group secured the sale of Icelandair Group.

Today, following the AMR news that was made public earlier this week, the group announced that it had sold off its Danish airline Sterling Airlines for 20 billion kronor ($293 million dollars).

The investment company had acquired Sterling in October 2005 after it merged with Maersk Air, and has operated the group during the past year.

FL also previously held a 23% stake in Finnair.

With FL's acquisition in AMR shares, it is now AMR's third largest shareholder with 12.8 million shares.

Who are number one and number two? Tontine Management, which owns 16.8m shares, and Primecap Management, with 16.5m shares.

Looking at the FL Group's track record with its previous airline-related investments, it would seem to me that FL is looking for a quick profit-taking opportunity here. I don't see any takeover attempt here. Besides, FL would be limited in the number of shares they could control in any such scenario because of foreign investment limits.

Then again, when any entity starts putting together large chunks of stock in a company -- it can be unsettling to management. Now the third largest shareholder of AMR shares, FL has bought itself a "seat at the table" as we say, giving them more say in any future moves by the airline.

It also goes without saying that this move also signals that FL feels American is not going to be left out of the merger mania dance.

Posted by Holly at 12:26 PM | Permalink | Comments (0)

Forget snow. In Florida this week Mother Nature decided to throw down a few tornadoes to ruin everyone's Christmas dinner.

And nowhere was she more nasty than in Daytona Beach, home to Embry-Riddle Aeronautical University.

According to reports, at least two tornadoes ripped a 100 foot swath across the campus, destroying the university's maintenance hangar and destroying or damaging the majority of aircraft that were parked.

According to the university's website, "There is substantial damage to several buildings on campus, including the administration building, Spruance Hall, and the Student Center. The recovery is already under way and every effort is being made to have everything operational when classes resume in January -- including using rental planes for the flight line."

The university now says that about 50 of its 65 aircraft were destroyed or damaged.

Posted by Holly at 12:09 PM | Permalink | Comments (0)

Big news for two regional airlines today.

First, Northwest Airlines announced a new ten-year deal with Pinnacle. (PNCL:Nasdaq) Even though the deal will see Pinnacle get lower margin rates for its flying for Northwest, the pluses here easily outdistance the negatives. One, the deal keeps Pinnacle as a Northwest partner flying as Northwest Airlink. Maybe more importantly, however, Northwest gave Pinnacle the right to fly for other carriers.

The agreement will allow Pinnacle to fly aircraft with up to 76 seats, above the previous 56-seat limit. It also lets Pinnacle fly for other carriers, except into and out of Northwest's hub cities of Minneapolis-St. Paul, Detroit and Memphis.

Pinnacle also receives an unsecured claim of $377.5 million, in settlement of all pre-bankruptcy claims against Northwest. In return, Pinnacle will take an 8% margin and give up any fuel-surcharge revenue to Northwest.

In addition, Pinnacle will also redeem its Class A preferred shares held by Northwest for $20 million, eliminating Northwest's right to name two directors and dictate the size of Pinnacle's board.

Woo hoo.

The news, in conjunction with a couple of nice analyst comments, caused shares of Pinnacle's stock to soar earlier today, and as of this writing it is now up 54% on the day. Nice chart, as you can see below.

In other news, those of you who are subscribers to PBB may recall that I talked this quarter after SkyWest (SKYW:Nasdaq) announced earnings that I thought we'd hear about a new contract for the airline sooner than later.

Well, it took a bit longer than I had expected, but today Midwest Airlines announced a new contract with SkyWest to fly 50-seat regional jets.

Not only was this a nice win for SkyWest. This contract is also notable for another reason. Mesa Air Group (MESA:Nasdaq) was aggressively trying to snare this one.

Midwest said SkyWest, flying as Midwest Connect, will operate a minimum of 15 and up to 25 Canadair Regional Jets for Midwest for five years under the pact. The flying is scheduled to begin in April.

Maybe it was just me, but I found this particular paragraph in the Midwest announcement interesting. "We chose SkyWest because of their experience, their excellent record of operational performance, and a commitment to customer service that mirrors that of Midwest,” said Scott R. Dickson, Midwest Airlines senior vice president and chief marketing officer.

A not-so-thinly-veiled sharp stick in the eye to an airline we all know, maybe?

Speaking of Mesa, the airline announced a joint venture agreement with Chinese airline Shenzhen Airlines this week.

The new airline (name not yet decided but we figure it should be China 5-0) is expected to start scheduled services within 12 months, initially operating 50-seat regional jets on domestic routes within the People’s Republic of China.

This is great. But I'd be happier for Mesa stockholders if I heard good news about improvements in Mesa's domestic operations. Something about "sticking to your knitting" before you go off and tackle a new project.

I think the loss of the Midwest contract is yet another indicator that Mesa needs to get its domestic house in order. Sooner rather than later.

Oh, one other note about Mesa. The flight attendants there have asked for help from the National Mediation Board, as negotiations between the airline and the flight attendant union are not progressing. The flight attendants are not a particularly happy bunch there right now. That rather non-existent health insurance Mesa now provides its employees (the one we gave them a BuzzBomb for) is one reason.

Ho Ho Ho. Merry Christmas.

Posted by Holly at 2:27 PM | Permalink | Comments (0)

From MarketWatch:

"A federal bankruptcy judge has ruled that Comair can impose wage cuts and other changes in work rules on its 1,500 pilots, according to a report after Thursday's closing bell. Judge Adlai Hardin gave the regional airline permission to throw out its contract with the pilots, the Associated Press reported. Comair is a subsidiary of Delta Air Lines Inc. Earlier this month, the pilots, represented by the Air Line Pilots Association, voted to authorize a strike if their contract was rejected by the court."

Posted by Holly at 4:22 PM | Permalink | Comments (0)

I'm sure that's what folks are saying who are stranded at Senor Pena's Palace of Planes right about now. (That would be Denver International Airport.)

By now you've all heard the numbing stats. No flights in, no flights out. Maybe tomorrow. If they are lucky. Thousands of travelers remain stuck in the airport.

Then there is Heathrow, which has been gripped by a bout of freezing fog. Anyone want to fly to London this weekend for Christmas? Good luck.

Meanwhile, here in the swamp, that same moisture that is coming down as snow in Colorado is coming down here as rain -- flooding many streets and homes in New Orleans. Some areas have had as much as 6 or 7 inches of rain since yesterday.

Looking out our door at the Worldwide Headquarters, I see rain, rain, and more rain.

Mother Nature seems unusually cranky this week. Maybe she needs someone to spike her eggnog. Anyone got any extra Wild Turkey?

Posted by Holly at 3:54 PM | Permalink | Comments (0)

Late today the Pioneer Press reported that Northwest Airlines is considering a merger deal with its regional partner, Mesaba. Northwest mentioned the potential deal in a note to employees on its employee website. Both airlines have now confirmed they are in talks.

According to the article,

"Officials of the airlines said the idea of a merger came from recent discussions on how Northwest and Mesaba can work together. Both airlines are based in Eagan, and both have had a difficult year of cutting costs, cutting jobs and negotiating labor contracts as they’ve restructured under bankruptcy protection.

The airlines discussed Northwest becoming a co-sponsor of Mesaba’s bankruptcy reorganization plan whereby Northwest would become the owner of Mesaba “in a principally non-cash” deal, said Northwest spokesman Bill Mellon. Such a deal would require approval by the bankruptcy court.

Airline officials said the discussions continue as the two carriers work toward a definitive agreement."

Doug Abbey, consultant with the Velocity Group in Washington was quoted as saying,

“The Mesaba saga has really been a soap opera of the highest magnitude,” Abbey said. “It solves a number of problems: Mesaba’s future and Northwest’s need for a high-quality regional partner.”

Abbey believes Northwest would operate Mesaba separately, and that such a deal would not affect Northwest's planned internal Compass regional operation.

Posted by Holly at 11:25 PM | Permalink | Comments (0)

I must say, it's rare that a news item actually surprises me. But this one did.

Don Carty, a former PlaneBusiness Ron Allen Airline (Mis) Management Award winner, was named CFO of Dell (DELL:Nasdaq) late Tuesday. (I take it I don't have to remind any of you of the circumstances under which Mr. Carty departed American Airlines.)

Hmmmm.

While Carty has been on the board at Dell for 14 years, I do find it a bit odd that he stepped into the position -- as the company faces two SEC investigations that cover periods of time when Carty was the audit-committee chairman for Dell.

Or, as the MarketWatch article we linked noted,

" We are not sure if Carty is the best choice as he has been a Dell board member since 1992 and was the audit committee chairman who oversaw financial activities that are now in question by the SEC," wrote Shaw Wu, analyst at American Technology Research, which has a neutral rating on Dell shares."

Guess Don got tired of waiting for that call about that airline CEO position.

Posted by Holly at 8:04 PM | Permalink | Comments (1)

Listening to Delta Air Lines' CEO Jerry Grinstein this morning, one could not come away from his comments with any other impression but one. The man does not want to be the one saddled with "Sold Delta Down the River" on his tombstone.

Not that we didn't already know this. After all it was Grinstein and company who, arguably, waited too long to take Delta into bankruptcy in the first place.

In both cases I think one can throw away the spreadsheets and the "what is the rational thing to do" arguments.

No, as I wrote two weeks ago in PBB, this situation with Delta has become far too much about emotion and ego. And nowhere was that more evident than in the comments of Delta's CEO this morning.

Case in point? "US Airways is the worst possible merger partner."

Given the current airline financial environment, I don't think I would be saying things like this publicly. Those words could come back to haunt him.

One thing is for sure. I don't think Doug Parker is on Jerry's Christmas card list.

This morning Delta revealed its restructuring plan for its escape from the jaws of bankruptcy. The airline filed a five-year business strategy with the U.S. Bankruptcy Court in New York, 15 months after seeking Chapter 11 protection.

In its filing, Delta said it will leave bankruptcy in the first half of next year, and forecast net income of about $450 million in 2007 and $1.2 billion in 2010.

Delta said its plan would let unsecured creditors recover 63% to 80% of their claims, and that Blackstone Group, a financial adviser, estimates the airline's value at $9.4 billion to $12 billion.

Delta also estimated that its operating margin would move from a negative 6.9% this year to 2.4% in 2007 and 10.5% by 2010. CASM will fall to 6.73 cents in 2007, down 20% from 2004, CFO Edward Bastian said on this morning's call.

So where does all this put us? Delta has gone public with its restructuring plan, which looks, not surprisingly, a little optimistic or aggressive (take your pick) in terms of what it expects to do on the revenue front in the next year or so. On the other side of the fence, I think the airline is also underestimating the potential effect of a potential merger.

Nothing we wouldn't expect them to do.

But contrary to what some people think -- even though this plan has now been filed, and even though the Jerry Grinstein-led board of directors has said "no" to a potential deal with US Airways -- the real power here still lies with the airline's creditors committee.

I will be very surprised if the committee does not vote this week to allow US Airways to proceed with the necessary due diligence it has to do in order to firm up its bid for Delta.

Then again, now that Delta has shown its hand with its restructuring plan, this could also open the door to other airlines who might be thinking about making a bid.

Bottomline -- we're not done here yet. Not by a long shot.

Posted by Holly at 1:45 PM | Permalink | Comments (1)

PlaneBusiness Banter subscribers can now access this week's issue here.

Posted by Holly at 7:41 PM | Permalink | Comments (0)

PBB will be posted later today, as I advised yesterday. No problems with backhoes, electricity, or lack of connectivity today. Ah, hey, it's just another week in post-Katrina paradise. Woo hoo.

But while I am waiting on some final edits to PBB to be completed, I wanted to pass this along. I know, I know. It's that time of year, and we're getting all kinds of "holiday" messages of one kind or another. Some are dumb. Some are funny. But this one, which was forwarded to me by a photographer friend, hit the spot. It's well done. it's silly. Nice way to waste a couple of minutes of time. Will put you in the holiday frame of mind, too!

Click here to have Santa and the reindeer serenade you.

Okay, off to the mines. Talk to you again soon!

Posted by Holly at 4:09 PM | Permalink | Comments (0)

Well folks, the local efforts to upgrade our infrastructure here in the swamp continue. I guess long term that is good news, as it's only been 16 months since that wench Katrina decided to visit. But short term, the rebuilding efforts continue to stymie our efforts to get this week's issue of PlaneBusiness Banter posted.

We were offline again this morning for 2-3 hours as the electric company came back for more work -- and it looks like we may be pushed offline again this afternoon. Apparently their new 1200 pound transformer is still not working quite right.

As a result -- rather than going nuts or screaming at the cats and the dog -- I've decided to remain calm. Trust me. It's not easy. But, it's an acquired trait I've developed after having lived through the last 16 months.

So -- PlaneBusiness Banter subscribers -- look for this week's issue to be posted Friday.

Posted by Holly at 11:21 AM | Permalink | Comments (0)

For those of you with enquiring minds who would like to read through AirTran's investor presentation regarding its offer to Midwest Airlines, you can download the presentation here. It is a PowerPoint file. (.pps)

Tickers: AAI:NYSE.

Posted by Holly at 10:58 PM | Permalink | Comments (0)

MarketWatch reports that Australian flag carrier Qantas has agreed to the proposed private A$11 billion ($8.65 billion) takeover offer it recently received.

The deal is led by an investor group that includes the Macquarie Bank and the Texas Pacific Group.

MarketWatch cites a report in the Australian newspaper saying that Qantas agreed to the deal after it was sweetened by 10 cents a share. Qantas's non-executive directors earlier said a $5.50 per share cash bid by the consortium was not acceptable, citing the complex terms of the offer. According to the report the directors were not happy with the overall bid price but also with the $100 million break-up fee if the deal failed to go through. Most of the conditions have been changed to placate Qantas directors, the Australian said.

Posted by Holly at 1:29 PM | Permalink | Comments (0)

Please excuse our absence the last day or so. It all started when the electric company showed up with a backhoe yesterday morning to do some "work" on their new transformer they installed about three weeks ago. Yes, well, the problem is that all our utilities come into the same general area in our back yard -- and yep, not 10 minutes after the backhoe started its noisy thing, we had no telephone lines and hence, no high-speed connectivity. Both lines were ripped out of the ground.

Searching television last night, I was satisfied that nothing earth-shaking had occurred with the things with wings.

Just goes to show you how much coverage the sector gets -- when it doesn't involve a crash.

This morning I was struck dumb to hear a report on Good Morning America in which they were discussing whether or not a Continental/United Airlines merger would be completed before the Christmas travel rush, and if so, what that would mean to travelers.

What the hell?

Finally, after BellSouth came and rewired us, I was once again able to get back online and get up-to-date. Then what did my wondering eyes feast upon but the news that AirTran is going after Midwest Airlines. 24 hours offline and look what happens.

According to the WSJ,

"Meanwhile, AirTran in the next few days is expected to publicly disclose a recent $200 million offer made to Midwest's management. The proposed deal would award shares $11.25 each in cash and stock, representing a 24% premium to where the company's shares traded yesterday. has been pursuing Midwest for over a year, people familiar with the matter say, but was rejected in its most recent approach earlier this month."

Actually that premium would be more like 38% by our calculations.

Are we surprised? No. Looking at potential US Airways/Delta and United/CAL deals in the works -- you have to assume that Frontier, AirTran, and Midwest are wondering if their smaller niches business plans are not somewhat in jeopardy.

However it appears at this point, Midwest is less than enthusiastic about AirTran's overtures.

As for the Continental/United hoo hah, there is really nothing new here. We all know both airlines have been talking for months. We know that United has also kept talking to Delta, in an effort to keep their "options open."

And no, contrary to rumors that took off like crazy late Monday, United CEO Glenn Tilton did not announce anything concrete at the airline's investor conference Tuesday. Then again, considering it's been years since the airline even held an investor conference, I can understand why some might have thought there was going to be more to the event than turned out to be the case.

But Tilton and Co. aren't stupid. The heightened speculation and the "leaks" that the two are talking that have come out in the last day or so have caused shares of both airlines to soar. Both stocks are already up more than 5% in trading today.

Tickers: CAL:NYSE, UAUA: NYSE, MEH:AMEX, AAI:NYSE.

Posted by Holly at 11:47 AM | Permalink | Comments (0)

Reports in both the Wall Street Journal and the New York Times this morning indicate that Sabre Holdings may announce as early as this week that it has agreed to be taken private.

Citing unnamed sources, the papers indicated Sabre could be valued at more than $4 billion, a premium on its current market capitalization of about $3.7 billion.

The Journal reported the most likely suitors as being private-equity groups, but also mentioned Amadeus as a potential player.

According to the Times, "The bidding group favored to win the auction includes Silver Lake Partners and Texas Pacific Group; a rival bidding group is led by Apollo Group. The people involved in the talks said a third group of investors is also considering a bid."

Posted by Holly at 3:18 PM | Permalink | Comments (0)

Only after the ICAO passed a change that will allow the vast majority of pilots in the rest of the world to fly until they are 65, and only after a hand-selected FAA committee failed to offer up a recommendation last week -- reports Monday say that FAA administrator Marion Blakey has apparently "seen the light" and is now going to push for the retirement age for pilots of U.S. carriers to be extended to age 65.

According to today's Wall Street Journal,

"According to people familiar with the situation, FAA Administrator Marion Blakey is crafting the new position slowly but steadily. Before spelling it out publicly, she is expected to gauge the willingness of incoming Democratic leaders in Congress to take the lead in advocating such moves. Input from the White House and Department of Transportation could affect the agency's actions. Bills calling for the policy shift failed to pick up enough traction this year. A spokeswoman for Ms. Blakey said the industry can "expect a decision relatively soon."

Finalizing new regulations could take 18 months or more, but FAA lawyers are mulling over whether to apply the new standard to currently retired pilots between 60 and 65, according to one person familiar with the process. Seniority rules could make it extremely difficult to make any change retroactive."

About time. Whether it is done as part of an FAA rule change, or a Congressional effort -- this changemakes sense on too many levels for it not to be completed.

Posted by Holly at 1:57 PM | Permalink | Comments (0)

Hi guys. It's Monday. Ordinarily, after such a spectacular drubbing of the Dallas Cowboys at the hands of the New Orleans Saints as we witnessed last night, chances are you would have found me in here last night -- celebrating.

Alas, the ugly stuff I had early last week and thought I was over, came back with a vengeance this weekend. As a result, I am one puny, but happy, Saints fan today.

Yes, just as I predicted here last Monday -- the Saints beat the Cowboys last night. But I'll admit. I never thought they would totally rip them to shreds. This was definitely an added bonus. Even though my head hurt every time I yelled at the TV screen -- it was okay. There are just some things you have to work through -- you know?

Now that I've sent appropriately snarky emails to many of my Dallas friends, it's time to start trolling the airline haunts to see what's up. Enough football frenzy.

BuzzBomb? We just received some info this morning on that. Still working. We'll post that info -- hopefully today. Unless I decide to crawl up into a ball and not move. Which doesn't sound like a bad idea.

Go Saints.

Posted by Holly at 1:29 PM | Permalink | Comments (0)

We've got a BuzzBomb in the works. We're just checking with the right folks to make sure we can directly attribute a particular column or not, before we go with it.

Stay tuned.

Posted by Holly at 3:02 PM | Permalink | Comments (0)

Allegiant Travel went public today, and while the markets aren't closed yet, I'd say the company can be pretty happy with it's debut party on Wall Street.

Shares of the IPO were priced above the $15-$17 expected range at $18, and as of this writing, they are now trading at $25. Over five million shares have traded hands. That new ticker symbol is ALGT.

Posted by Holly at 2:40 PM | Permalink | Comments (0)

PlaneBusiness Banter subscribers may now access this week's issue here.

Posted by Holly at 10:19 PM | Permalink | Comments (0)

Hi guys. Look for this week's issue of PBB to be posted later today. I'll let you know when it is ready to go.

Posted by Holly at 5:03 PM | Permalink | Comments (0)

Sorry about that folks. Seems our server went down last night and the oh-so-vigiliant 24-7 elves at our hosting service were apparently already in bed by 9 p.m.

No worries. We're back up this a.m and all is right with the world.

At least for now.

Posted by Holly at 8:45 AM | Permalink | Comments (0)

Both the Wall Street Journal and Bloomberg are reporting that we could hear, as early as tomorrow, that Lufthansa has agreed to purchase 20 747-8 Intercontinental aircraft from Boeing, with options for 20 more. These will be the passenger version of the aircraft, not the cargo version.

This is the new "stretch" version of the 747 aircraft. Interesting in that Boeing just recently modified the 8i product -- adding some seats to its basic configuration. While this did reduce the maximum range of the aircraft -- you have to wonder if this change wasn't what helped to make the Lufthansa deal a "go."

This is not, repeat, not good news for Airbus.

Posted by Holly at 3:02 PM | Permalink | Comments (0)

Today the DOT officially announced it was withdrawing its proposal to change the rules regulating foreign investment in U.S. airlines.

The Secretary of the DOT, Mary Peters, said in a statement that the Department remains "committed to an Open Skies aviation agreement with the European Union."

Only problem, of course, is that the EU has more or less linked the passage of a new Open Skies agreement to the loosening of the foreign investment regulations in the U.S.

That's okay. As I have written more than once this year in PBB, I was not a fan of the proposed rule change for two reasons. One, I was not sure that Congress should not be the body to authorize such a change and two, I was very skeptical of the wording of the proposed change -- especially as it pertained to the issue of foreign entities and their ability to "control" certain aspects of a carrier's marketing and other operational decisions. I felt the proposed rule was simply too vague in a number of areas, making it almost unenforceable.

Finally -- there's also the question of just why it is we need to open up airlines to "much-needed" foreign investment in the first place. It's pretty clear there is a lot of money chasing airline deals in the U.S. right now. Maybe too much money.

However, we do need a new Open Skies policy between the EU and the U.S.

So let's start over and do it right this time.

Posted by Holly at 2:41 PM | Permalink | Comments (0)

An update on the expected IPO of Allegiant Travel. The deal now looks like it should go out on Friday. But forget about getting in on the ground floor of this one --unless you've already locked up your shares. The deal is already heavily oversubscribed.

Just a reminder. The ticker here is going to be ALGT.

The Las Vegas-based travel company that also just happens to run an airline now provides air service to 45 cities.

For the last nine months ending Sept. 30, the company reported net income of $10.3 million on revenue of $180 million. In 2005, the company reported net income of $7.7 million on revenues of $92.5 million.

Posted by Holly at 2:33 PM | Permalink | Comments (0)

Here we go again.

Is it just me -- or is it clear the Federal government is simply hell-bent to set up a "terror-database" network whether Congress okays it, the public wants it, or it's even legal?

I think we all know the answer to this question.

First it was the "centralized information database" concept that former Retired Admiral John Poindexter was in charge of. You all remember that effort. It was called "Total Information Awareness."

I would call it "Big Brother on Steroids."

When Congress put the stop to that little intrusive project, which sought to compile databases containing everything from airline ticket sales to credit card charges to law enforcement records to banking records, then Homeland Security took the same concept and began to apply some of the same database mining components as the centerpiece of its new CAPPS II program.

When that program was shot down by Congress, the GAO, and privacy groups for security concerns and a general fear that it's reliance on third-party data providers was inherently problematic -- not to mention potentially error-prone -- Homeland Security simply renamed the program "Secure Flight," made a few minor tweaks and went about its merry way.

I've always liked that "warm and fuzzy" moniker of "Secure Flight." Don''t you?

Now, thanks to a filing in the Federal Register that popped up in November, we find out that while all this was going on, the federal government has been secretly collecting information on U.S. citizens who have traveled in and out of the country -- for the last four years.

Virtually every person entering and leaving the United States by air, sea or land has been scored by the Homeland Security Department's Automated Targeting System, or ATS.

The scores are based on ATS' analysis of their travel records and other data, including items such as where they are from, how they paid for tickets, their motor vehicle records, past one-way travel, seating preference and what kind of meal they ordered.

So how interesting is it that this has been going on the entire time the same department has been told repeatedly by Congress to clean up its act or forget it -- in regard to privacy issues involved with the "Secure Flight" program?

It's also pretty clear now that "Secure Flight" was always designed as just an add-on to this existing secret database system.

But then again, why should we be that surprised?

In an August 2004 issue of CIO magazine, Poindexter basically foretold what we now know to be the case.

"Retired Adm. John M. Poindexter still slips into the present tense when he talks about Total Information Awareness (TIA).

He does this despite the fact that he resigned from the Defense Advanced Research Projects Agency (DARPA) a year ago amid controversy, despite the fact that DARPA subsequently dissolved the Information Awareness Office (IAO) he had built, and despite the fact that DARPA ostensibly canceled TIA, the wide-ranging program to use technology for gathering intelligence to combat terrorism. Poindexter, however, still believes in TIA. In fact, he maintains that TIA hasn't really gone away; it's just gone undercover. "

Great.

Oh, and yes, in case you missed it -- the Department of Homeland Security says it plans to keep its ATS database of "risk assessments" on file for 40 years, sharing it with law enforcement officials, state, local, or state officials, courts, Congress, you name it.

But you? You and me? No, we are not allowed to see our terror profile.

Why?

Because, according to the Associated Press, in the Federal Register, the department exempted ATS from many provisions of the Privacy Act designed to protect people from secret, possibly inaccurate government dossiers. As a result, it said travelers cannot learn whether the system has assessed them. Nor can they see the records "for the purpose of contesting the content."

This ATS system, which as I said, has been in existence for more than four years, is supposed to "officially" begin operations today.

Needless to say, we here at PlaneBusiness do not support our government using the travel industry as a prop to what seems to be one of the largest secret data-mining programs ever put into place by the U.S. government.

Posted by Holly at 12:57 PM | Permalink | Comments (0)

Oh, I know. There's a LOT to talk about in the airline sector this morning. But you know how the song goes, "It's my party and I'll cry if I want to..."

Well, I don't want to cry. My voice is shot anyway. It would be more like a croak. As for my hands? Let's just put it this way. Ever clap so much and so hard that, hours later, your hands feel like you've played the piano for 20 hours and you can't sleep they ache so much?

Yep. Sounds like yours truly was at a sporting event yesterday.

And not just any sporting event.

No, I decided on the spur of the moment that to celebrate that once a year milestone we all have to endure -- I was going to go see the Saints play San Francisco in the Superdome Sunday.

David had been pestering me about what I wanted to do to celebrate the aforementioned event, and for some reason (probably a result of way too much food ingested at Thanksgiving), a dinner out did not appeal to me.

Instead I got online, managed to snare two pretty good tickets to the game from the season ticket resell service, (all the home games are sold out) and so yesterday off we went.

Little did I know it was going to be Reggie Bush's coming out party as he scored four acrobatic touchdowns. I fully expected to hear the Trojan fight song come over the public address system after the third one.

And hey, speaking of music, Jimmy Buffett was on hand to sing the national anthem. How cool is that? As a card-carrying Parrott-head, I was psyched.

R-E-G-G-I-E. R-E-G-G-I-E. R-E-G-G-I-E.

I had forgotten how loud the Dome can be.

Silly me.

Today not only can I not talk, and my hands still hurt, but I woke up hearing that damn chant in my ears.

But that was yesterday. Next Sunday night -- the shoot out in Texas stadium with Tony Romo and the Boys.

Yep, I already received three emails and one text message this morning about the game. Considering what a large PBB subscriber base we have in the DFW area, I'm sure they are not going to be the last.

Yes, well, bring on da Boys. Reggie and Deuce are going to rock the house. That is, unless Drew Brees decides to crank up the aerial attack. (But frankly we're somewhat grounded in that department with a couple of key receivers hurt.)

But either way, Saints take the Cowboys in what is going to be one heck of a game.

Hopefully my voice will have returned by then.

Posted by Holly at 11:08 AM | Permalink | Comments (0)

Loren Steffy, who used to cover airlines for Bloomberg, is now a business columnist with the Houston Chronicle.

Loren takes a swipe at the ongoing merger mania in the airline sector in his column this week in which a well-known airline CEO whines to Santa about what he wants and why he thinks he has to have it.

Nice job Loren.

Although done in jest, his column brings up a good point. If you are an airline CEO right now -- just what do you do? Sit on the sidelines or jump into the shark-infested merger pool? If you don't consider a merger, you may be odd man left out. But if you do, then what?

There's no easy answer. But it's certainly the reason the next six months in this industry are going to be some of the most interesting in recent history.

Posted by Holly at 11:02 AM | Permalink | Comments (0)

Yesterday bad weather was the name of the game at DFW, before the storm that is now socking Chicago moved East.

Needless to say, for American, considering that both St. Louis and Chicago are now out of the mix, DFW has been pretty much a nuthouse this morning.

And that was before the power went out.

Yep. Just had two confirmations that most of the DFW Airport now has no power.

The outage apparently includes the control tower.

Oh boy.

Posted by Holly at 12:10 PM | Permalink | Comments (0)

If that's the case, and you were planning on flying out of Chicago -- forget it. The latest from Chicago -- American's operation at ORD is completely shut down until 5 p.m. United is operating sporadically.

Maybe a bicycle would not be such a bad idea? Even better -- stay home.

Posted by Holly at 12:02 PM | Permalink | Comments (0)