PlaneBuzz

Oh, boy. I can upload graphics again. Yes, we had some kind of little technical glitch with the program we use to upload stuff yesterday. Hence, we were graphic-less.

Horrible state to be in.

How is everyone today, on this, the 31st day of January?

This date is significant, in that tomorrow had been the deadline US Airways had given Delta's creditor's committee to get its act together and either allow US Airways to move forward on its merger proposal or not.

According to reports this morning, and confirmed by a US Airways' official statement about 10 minutes ago, the deal from US Airways is now off the table.

From that release:

"We received word earlier today that Delta’s Official Unsecured Creditors’ Committee would not be able to meet our demands by the Feb. 1, 2007 deadline. As a result, we have withdrawn our offer to merge with Delta Air Lines. While we are disappointed that the Committee has chosen to ignore its fiduciary obligation to Delta’s creditors, we are excited about our future and proud of our team’s performance during this process."

Ticker: (NYSE:LCC)

Posted by Holly at 11:31 AM | Permalink | Comments (0)

According to the Financial Times today,

"The Italian government surprised everyone this week by revealing that 11 potential bidders for the ailing Alitalia had submitted expressions of interest. This was far more than expected but also owed something to lax checking of candidates.

Happily, that meant that along with global powerhouses such as Texas Pacific, UniCredit and a group featuring Goldman Sachs, there was Fabio Scaccia, who teaches aviation at a technical institute south of Rome.

Scaccia, whose name was third on the official press release from the Treasury ministry, was surfing the internet, saw details of the sale and submitted his bid to Merrill Lynch, which is advising the government. The requirement that bidders have assets worth at least 100 million euros seems to have been waived in his case.

He said on Tuesday his bid was an orderly protest about years of mismanagement at the airline, which is losing over 1 million euros a day.

“I did it out of indignation not because I really want to buy [Alitalia]. I wish! I don’t have enough money for that, I’m a teacher and my wife’s a housewife.”

It will be up to all those real financial bidders at least to show they know as much about air travel as Scaccia, who says he’s studied aeronautics for 30 years."

Posted by Holly at 7:03 PM | Permalink | Comments (0)

"The Federal Aviation Administration has proposed raising the retirement age for commercial pilots from 60 to 65, a decision that could help older pilots cope with diminished salaries and retirement benefits, but would slow career advancement for younger pilots.

Marion Blakey, the FAA’s administrator, said Tuesday that his proposal would allow commercial pilots to fly who are older than age 60, as long as the other pilot on the flight deck is 59 or younger. That matches a rule put in place last year by the International Civil Aviation Organization. While that provision does not affect U.S.-based pilots, it would allow foreign pilots older than 60 to fly into the United States.

“A pilot’s experience counts, it’s an added margin of safety,” Blakey said in a statement. “Foreign airlines have demonstrated that experienced pilots in good health can fly beyond age 60 without compromising safety.”

Raising pilot retirement age has been a contentious issue for several years. Many pilot groups, including the Allied Pilots Association, which represents American Airlines pilots, have opposed the idea. Others, however, including the union for Southwest Airlines pilots, have lobbied in favor of a change.

The decision isn’t final. The FAA will publish its proposal in coming months, and then will accept public comments before deciding whether to implement the age change.

The retirement age dates to 1959, and was implemented in part because of a strike at Fort Worth-based American. The airline had established a mandatory retirement at age 60, and three pilots brought a grievance against the airline after they were forced to retire. C.R. Smith, the airline’s founder and chief executive, refused to reinstate them, which sparked a 21-day walkout.

Smith asked the FAA to establish 60 as a mandatory retirement age for pilots, and the rule was later adopted as the federal standard."

-Ft.Worth Star-Telegram, Trebor Banstetter.

Posted by Holly at 4:41 PM | Permalink | Comments (0)

Was talking to someone in the industry this morning and he said to me, "It's awfully quiet on the Delta/US Airways front. Think it's dead?"

I'm not sure. Although not too long after I talked to him, Delta announced it has secured $2.5 billion in exit financing for its stand-alone restructuring plan.

The most circulated rumor today concerning the deal is that US Airways was willing to up its offer another $1 billion, but only if Delta then let US Airways begin moving on due diligence, along with other necessary legal steps that would be necessary to get the merger rolling.

Well, we've had no official notice that US Airways has upped its bid, now have we?

So here we sit.

Which reminds me. If the proposal for Delta does go down in flames, then what? As I said to someone this morning, the options at that point for more than one airline begin to get much more interesting than if the deal were to begin an official move towards possible fruition.

Ticker: (NYSE:LCC)

Posted by Holly at 1:08 PM | Permalink | Comments (0)

For those of you who are PBB subscribers, an advance correction notice for our column last week on ExpressJet. (It will be mentioned in this week's PBB as well.) Yours truly experienced a brain short-circuit when writing last week on the new 50-seat jet operation. I had 44 airplanes on the brain apparently.

Anyway, I referred not once (that would be excusable) but twice, to the new "44-seat" operation. Duh. My apologies. Obviously most of you just assumed I had lost my mind and went on your merry way, figuring out what I really meant -- there are 44 aircraft in the operation, and they all have 50 seats.

Posted by Holly at 12:51 PM | Permalink | Comments (0)

Hi all. I know. I was AWOL yesterday. Just trying to get a bit ahead of the earnings onslaught from last week and today.

We now have more details on the new 50-seat operation that ExpressJet is getting ready to unroll this week.

Was just talking to someone in the industry this morning, and he remarked to me that he was somewhat surprised that there had not been more written about the new operation. I agree.

In a nutshell, ExpressJet is going to take 44 of of its 50 seaters it used to fly for Continental (you may recall that Continental modified its contract with ExpressJet, eliminating a total of 69 regional aircraft, effective this year.) and they are starting a small point-to-point regional operation of their own.

Gutsy move.

Last week CEO Jim Ream was not very long on details about the new operation, and the official roll-out for news is set for Thursday.

But, thanks to Scott McCartney at the WSJ, we do know more cities that are involved in the new operation. They include Ontario, Calif., near Los Angeles, which will apparently be the new airline's busiest city, with nonstop flights to 14 cities.

Other cities that will see new service are: Albuquerque, Austin, Bakersfield, Birmingham, Boise, Colorado Springs, Corpus Christi, El Paso, Fresno, Jacksonville, Kansas City, Louisville, Monterey, New Orleans, Oklahoma City, Omaha, Raleigh-Durham, Sacramento, San Antonio, San Diego, Spokane, Tucson, and Tulsa.

For those with enquiring minds, I'd point out that that bulk of these cities are current Southwest cities.

Interesting.

Posted by Holly at 12:40 PM | Permalink | Comments (0)

This week's issue of PlaneBusiness Banter is now posted. Subscribers can access it here.

Posted by Holly at 10:01 PM | Permalink | Comments (0)

Ah, the sun is shining and it's a beautiful day here in the swamp. It's about time, that's all I have to say. It's been grim, grey, and well, glum, around here for more than a week.

Meanwhile, all of us here at the Worldwide Headquarters are merrily typing away. Except for the cats. They're all out in the sun. Smart animals.

Look for this week's looong issue (earnings tend to do that) to be posted in a bit. Shouldn't be too late today.

Talk to you then!

Posted by Holly at 3:27 PM | Permalink | Comments (0)

Yesterday Ben Mutzabaugh, in his "In the Sky" blog at USA Today wrote about an incident involving a small child and her parents. Apparently all three were traveling on an AirTran flight. Only one problem. Said child, age 3, refused to stop screaming.

Here's the text of the blog entry:

AirTran is defending its decision to remove a family from one of its flights after a 3-year-old girl's parents could not calm her temper tantrum. "After the family boarded an AirTran plane in Fort Myers on Jan. 14 for a flight to Boston, the child became temperamental and refused to take her seat," the Orlando Sentinel writes in its account of the incident. The girl "was climbing under the seat and hitting the parents and wouldn't get in her seat," AirTran spokeswoman Judy Graham-Weaver adds to The News-Press of Fort Myers. Her parents insisted that they could have calmed the girl if they had just been given a little more time. "We weren't given an opportunity to hold her, console her or anything," mother Julie Kulesza tells The Associated Press. By federal law, children older than 2 must sit in a seat secured with a seat belt in order for a plane to be cleared for takeoff, according to the Sentinel.

"The flight was already delayed 15 minutes and in fairness to the other 112 passengers on the plane, the crew made an operational decision to remove the family," Graham-Weaver says. The family was refunded their ticket price. The family also was offered free round-trip tickets to anywhere the AirTran flies, which the New-Press says was declined. ABC News quotes the family as saying the flight's passengers were more sympathetic than the crew, though no other passengers were interviewed for the story. The girl's grandfather acknowledged that "nobody wants to sit on a plane with a crying child," but adds "your first attempt should be to remedy the situation before you take a drastic action, and that wasn't done." He adds: "My granddaughter is 3. Kids are kids." Says AirTran's Graham-Weaver: "We have an obligation to the other passengers to move the plane."

Posted by Holly at 10:55 AM | Permalink | Comments (2)

In today's ExpressJet earnings call, CEO Jim Ream outlined the three-pronged business plan the airline has mapped out for itself going forward.

Without a doubt, the most controversial is clearly the 44-seat regional network carrier the airline plans to roll out next week. Sound eerily like another Independence Air? Not hardly, according to Ream.

Jim said in the call that unlike Indy, which sought to position itself as a "low-fare" carrier, ExpressJet intends to charge market rates for its regional routes.

Where will they fly? We don't know. Average fare? Don't know. Average length of haul? Don't know. The airline was tightlipped in its call today with any details -- other than the fact we'd find out more on Feb. 1.

Mark you calendars now.

(NYSE:XJT)

Posted by Holly at 4:07 PM | Permalink | Comments (0)

We know, and work with, some really special people.

Our PBB Brown Bag Analyst apparently decided we losing Saints fans here at the Worldwide Headquarters needed a "pick-me-up." So lo and behold, what arrived here yesterday shrouded in dry ice but a tasty "consolidation" prize box from our friend in Chicago.

The Lou Malnati pizza is in the refrigerator, as it needs to defrost fully before we can pop it in the oven, but I had to sneak a piece of the Eli's Cheesecake last night. Oh.Yum. Very light crust and rich, rich, and creamy, creamy.

Thank you my friend. You've made the agony of defeat much less daunting!

For those of you who might like to send Chicago food delicacies to someone you like -- it's pretty easy to do. Just go here to the Tastes of Chicago website.

And yes, this is airline related, as the first time I had a piece of Eli's Cheesecake was on a United Airlines' flight. Small world department -- as it was on a Dallas-Chicago flight I was taking to go to United headquarters. I spent the day talking to the top management folks there.

The reason for the high-end lunch on such a short flight? United was making an effort to "upscale" their food offerings in an attempt to sway American customers.

Doubt they served the cheesecake in coach, however.

Thanks again to our friend and cohort in Chicago. His "winner's package" will be on its way later in the week.

Posted by Holly at 1:42 PM | Permalink | Comments (0)

After a day to lick my wounds and recover from stress levels not recorded in recent history -- it's time to get back to work. Well, that's not totally true. I was back to work yesterday, just not here.

Looking over the airline landscape today, a couple of things of note. One, United Airlines reported earnings this morning. I'm off to listen to their call when I get done here, but the long and the short of it is this -- the airline did not do as well as had been expected. Even considering their December Denver Dilemmas. As a result, shares here are under a lot of pressure today. Last time I checked, they were down 8% to 44.86.

Figures. I just put them in our first quarter basket of stock picks last week. Thanks guys.

That's okay. The pick was not based on fundamental reasons anyway.

How's that for an excuse? Weird, but true.

The airline said today that it lost $61 million, or $0.55 cents per share, compared with $16.9 billion, or $145.47 per share, a year earlier, while the company was still in bankruptcy. (This comparison is not really very relevant, given all the reorganization charges included in that loss for the fourth quarter last year.) But what is relevant is the airline had been expected to only lose $0.42 a share.

In other news -- not sure if the hearings are going to be on C-Span or not (their online scheduling calendar is not working at the moment -- at least not for tomorrow's events), but tomorrow, hearings will be held on Capitol Hill by the U.S. Senate Commerce Committee -- as they take a look at airline consolidation.

For those of you who are located in the Big Apple -- here's a nice way to spend your lunch hour tomorrow. Go to a book signing.

John Newhouse, author of the new book "Boeing versus Airbus: The Inside Story of the Greatest International Competition in Business," will speak tomorrow at noon at the 92nd St. Y's Makor-Steinhardt Center. That is located at 35W. 67th St.) Tickets for the event are $16. Copies of the book will also be available for purchase and John will be happy to sign your book, or answer your questions.

For more info, you can click here.

Posted by Holly at 3:14 PM | Permalink | Comments (0)

Yikes. Well, at least it was over for much of the fourth quarter, so I didn't have to suffer that long. (Actually it was more than long enough.)

<sigh>

Hey, if you have to lose, at least we lost to a class organization that's led by a class act for a coach.

Congratulations to the Chicago Bears and Lovey Smith. All hail the Soldier Field warriors!

.......is this in any way related to the airlines?

Of course. The Saints will be flying back to New Orleans on a Delta Air Lines operated charter aircraft!

Let's go see what the Colts and the Patriots have up their respective jerseys.

Posted by Holly at 6:18 PM | Permalink | Comments (0)

Okay, our PlaneBusiness Brown Bag Analyst, who just happens to live in Chicago, and I have come to terms on the bets for tomorrow's game.

No surprise given the two cities. It's all about food.

You didn't really think we'd dress up in funny outfits and make fools out of ourselves, now did you?

So if the Saints beat the spread, I get a huge "Taste of Chicago" care package including Eli's cheesecake, hot dogs, and PIZZA!

If, god forbid, the Bears beat the spread and win, he will get two New Orleans' muffalettas, gumbo, coffee, and crayfish etoufee.

Oh, and for those of you who read PBB this week, in which I implied I had expended all available emotion for the game last week and therefore had none left for this one tomorrow -- you didn't believe that did you?

Yep. I'm a nervous wreck.

Go Saints.

Mush!

Posted by Holly at 5:58 PM | Permalink | Comments (0)

Have at it. PBB subscribers can access this week's issue here.

Posted by Holly at 4:43 PM | Permalink | Comments (0)

Hi all. We'll be posted this afternoon. We're in final edits now. Talk to you later!

Posted by Holly at 12:23 PM | Permalink | Comments (0)

Will someone explain to me why Michael Vick was even flying on an AirTran plane this morning from Miami to Atlanta?

Doesn't this guy and his posse fly a private jet?

Oh, that's right. Vick is an AirTran spokesman.

At least he was last time we checked.

But maybe not for long.

Ticker: NYSE:AAI

Posted by Holly at 7:53 PM | Permalink | Comments (0)

It's going to be tomorrow for this week's issue folks. Nothing out of the ordinary. I've just become wrapped up in earnings numbers, calls, whatever. I'll give you guys an update in the A.M.

Posted by Holly at 6:29 PM | Permalink | Comments (0)

Okay, so the brilliant minds at TSA have decided to invest in yet another new piece of technology to help make us more secure when we fly. Or rather, some of us.

What was this latest bit of technology supposed to do?

It was supposed to let those flyers who have paid for the right to be dubbed a "Registered Traveler" the ability to just walk through security without taking their shoes off.

Uh-huh.

No surprise then, that the machines just also happened to be marketed to the TSA by the private companies, such as Stephen Brill's Verified Identity Pass, that are the ones behind the "registered traveler" program. After all, unless their clients who are ponying up big bucks to become a "Registered Traveler" can actually clear TSA security lines quickly, what's the point?

According to USA Today Wednesday,

"Many air travelers who were screened Tuesday by a revolutionary new machine aimed at letting them keep their shoes on through airport security got an unexpected surprise — they had to take their shoes off anyway.

About half of the travelers using Orlando International Airport's first-in-the-nation ShoeScanner underwent the very hassle the machines were designed to ease — putting shoes through checkpoint X-rays — because the ShoeScanner detected metal in their shoes.

"It's a waste of time," Tracey Grenkoski of Orlando said after spending more than a minute on a ShoeScanner only to be told to remove her high-heeled shoes. "What's the point of me standing there if I still have to take my shoes off?"

Grenkoski had company. Of 50 travelers who used the ShoeScanner in a one-hour period here Tuesday, 28 had to remove their metal-laden shoes, according to USA TODAY's observation."

But here's the good part.

"Brill's company submitted the machine last year to the TSA for approval. General Electric's GE Security, which makes the $200,000 machine, hoped it would detect explosives and distinguish between metal commonly found in shoes and metal that could be a weapon, said company product manager Daniel Mahlum. The company is trying to upgrade the machine so it can allow passengers to wear shoes that contain harmless metal.

For now, TSA spokesman Christopher White said, if the ShoeScanner senses any explosives or metal, "it's going to require additional scrutiny.

Brill said he expects people in Registered Traveler to stop wearing shoes with metal."

Posted by Holly at 6:27 PM | Permalink | Comments (0)

Just never know what a Thursday is going to bring, do you?

Today it was reported that Pinnacle, the Northwest Airlines' regional with a newly rejuvenated life -- thanks to Northwest -- is buying smaller fry Colgan Air.

Heh. I flew on Colgan Air twice. And you know, nothing personal to the fine folks at Colgan, but that was enough for me.

The most interesting thing about this news is that Colgan currently flies for United, US Airways and Continental.

So what does all this mean? Hmmm. The twisted turbine is in high gear over this move.

You can read about it here.

Posted by Holly at 12:53 PM | Permalink | Comments (0)

Earnings showtime that is

Today both AMR, parent of American Airlines, and Southwest Airlines, reported fourth quarter and year-ending earnings results.

AMR managed to squeak out a small $17 million, or $0.07 profit for the fourth quarter, the third quarterly profit in the row for the airline. The airline has not been able to string together three profitable quarters in a row since 2000. This result was much better than forecast consensus, which had been for a loss of 7 cents a share.

These results compared favorably to a loss of $600 million, or $3.46 cents per share, posted by the airline a year earlier.

AMR said it earned $231 million, or $0.98 a share, for all of 2006 compared to a loss of $857 million or $5.18 a share in 2005. This yearly profit was also the first since 2000.

Interestingly, as those airlines that did not have sizable fuel surcharges in place over the last few years should see the positive result of a declining oil price kick in this quarter, it's just the opposite for Southwest Airlines -- which for years had a built-in advantage because of its legendary fuel hedges.

But as we all know, those hedges are now beginning to lose their clout -- as they continue to rise. For the fourth quarter, Southwest spent 41% more than it did last year on fuel

Consequently, for the fourth quarter of 2006 Southwest saw its fourth quarter profit down 19% year-over-year as a result of higher fuel prices and rising security costs.

Net income in the fourth quarter fell to $57 million, or $0.07 cents a share, from $70 million, or $0.09 cents a share, a year ago.

Excluding special items, the airline posted profit of $96 million, or $0.12 cents a share, up from $81 million, or 10 cents a share, last year. Revenue grew 15% to $2.3 billion. That 12 cent a share figure missed the consensus analysts' forecast figure of 13 cents per share.

For the full year 2006, net income was $499 million, or $0.61 cents per diluted share, compared with $484 million, or $0.60 cents per diluted share, for 2005.

Excluding special items, 2006 net income was $587 million, or $0.71 cents per diluted share, compared to $425 million, or $0.53 cents per diluted share for 2005. Revenue grew 20% to $9.1 billion.

Speaking of oil prices, the price of a barrel of crude closed Tuesday at $51.21 a barrel, a 19-month low. It was up over a buck today when last we checked.

NYSE: AMR, NYSE:LUV

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

Funny thing happened this week. Actually it started last week and has only picked up momentum this week.

Former Continental Chairman and CEO Gordon Bethune seems to have taken center stage in the Delta/US Airways saga.

In the last 7 days or so, it seems like Gordon has made himself available to various media outlets left and right, more than happy to bask in the glow of his role of "adviser" to the Delta creditors committee.

I mean, how weird is this?

Does the creditors committee really want him out there saying things like Reuters quoted him today as having said in an interview? (Today he was quoted as saying, "Delta's creditors' interests are so diverse that getting enough of them to back any proposal is "like herding cats.")

Or can Doug Parker and the folks at US Airways feel good when Bethune, who we all know is a proponent of industry consolidation, seems to take a big pass on recommending the deal in the same interview, as he makes the comment, "I can still be a proponent of marriage without agreeing that these two people have to get married."

Yack, yack, yack. You were hired to do a task Gordo, not become the equivalent of Pat O'Brien offering up the latest "dish" on The Insider.

Just seems to me that now that Bethune is involved in this, he is obviously encouraging more and more media coverage of his involvement in it, i.e., it certainly doesn't seem like he is telling reporters he won't talk to them.

Consequently, for some reason I don't see him simply turning in his time slip to the creditors committee when his job as "adviser" is done and then going back home.

Or I the only one who thinks Gordon might just be getting a little too used to the limelight again -- and might now want to stay there as part of any eventual Delta deal that is struck?

Tickers: CAL:NYSE, LCC:NYSE

Posted by Holly at 11:36 PM | Permalink | Comments (0)

We got an email last Friday with this lovely image attached.

And what great timing.

Because I have to admit, when I read Delta ALPA MEC Chairman Lee Moak's comments about the proposed US Airways deal Friday afternoon, this is exactly what I thought of.

For those who missed it, Moak ended his letter to the Delta pilots last week with, "Delta pilots will not change any provision of our contract in order to facilitate the hostile takeover of our company,"

"As such, the MEC remains totally committed and one hundred percent focused on one thing -- the death of the US Airways' merger attempt," he added.

Okay, time for the truck to back up and unload the political BS. C'mon Lee. The "death" of the deal? A little on the dramatic side if you ask me, but certainly in the realm of heated union rhetoric.

I have nothing against Lee. In fact we've exchanged pleasant emails in the past. But I do have a problem when I see a public stance that is taken strictly because of union politics -- and not pragmatic reasons.

Oh, I understand perfectly well why Lee has to take this stance, and it hits at just one of the reasons why the labor/management relationship makes this industry much more difficult to manage.

The reason is that the people who are leading unions have one political choice -- either they stick up for the option that appears to be less "threatening" to their union base in the short term -- or they will be kicked out of office.

Fine -- but it offers no chance for either side to look at the longer term, and what is the better option for the company, because the option that may give the company the best chance for survival is rarely the one that will benefit union members the greatest in the short term.

And people wonder why this industry continues to be shackled to its recurring dysfunctionality.

Ticker:DALRQ.PK

Posted by Holly at 2:59 PM | Permalink | Comments (0)

Someone just emailed me and wondered,

"How many articles of clothing do you have to remove to sell an A380 these days?

I suspect that dropping trou is only the first step in selling an A380. The next step is bending over… (the next step is left to the imagination of the reader)…"

Yeooow.

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

Definitely goes to Reuters today for their story entitled, "Airbus CEO Dropped Trousers for Key U.S. Plane Deal."

"Jean Pierson, the former chief of European plane-maker Airbus, "dropped his trousers to seal a key U.S. plane order in 1997," Reuters reports. The news agency says the account comes from the book "Boeing versus Airbus," which is set to be published Tuesday.

As for Pierson's episode, Reuters writes that Airbus was negotiating with then-US Airways chief Stephen Wolf on a 400-plane deal. "At the last minute, … Wolf started arguing for a 5% discount on the selling price," Reuters says. And, according to the book, "Pierson began slowly lowering his trousers and saying 'I have nothing more to give.' He then allowed the trousers to fall around his ankles." Wolf is said to have responded by saying: "Pull up your pants. I don't need any more money."

Reuters writes that "shortly afterward, US Airways announced the purchase of 124 single-aisle Airbus A320 family jets with options for 276 more, a stab into the heart of Boeing's competing 737 program. It put the European company on track to overtake Boeing in global orders only two years later."

Tickers: BA:NYSE, LCC:NYSE

Posted by Holly at 2:06 PM | Permalink | Comments (0)

Okay, enough about pigskin playoffs.

We said last week we wanted to know more about the reason American removed a portion of its available inventory from Expedia.

It appears we now have an answer. Kind of, sort of. If you dig through the reasons given by both sides, I think it comes down to one thing -- the airlines are going to let the third party sites continue to sell the bottom bucket fares, but they want the chance to directly interact with their higher fare customers. Hence -- it would appear that American is just the first in what will probably become a much longer line.

According to The Beat newsletter Friday,

"Expedia's decision to "cease processing American Airlines bookings using the Worldspan global distribution system" is what led to the termination of domestic premium class and international fare processing on AA by Expedia as of Monday Jan. 8, according to an Expedia.com spokesperson.


"AA has made additional statements in the press that refer to negotiations between Expedia and AA," the official wrote in an email. "Expedia made this decision independent of any negotiation issues with AA. We do not see the need to comment further at this time."

The IAG blog noted today,

"Bottom line? Airlines are continuing to take back their product distribution. Last wee we wrote about how Alaska Airlines is thrilled with their own web site's success. The news from Alaska is certainly not unique. Every ticket bought through an OTA (online travel agent) incurs a fee for processing which you only see when you are about to make the purchase. This fee even shows up separately on the credit card statement. Consumers are using the online tools available to find the lowest fare and then go to the airline's web site to make the purchase and save $5 per ticket.

The Internet is the shopping place for bottom fishing, and the lowest fare buckets sell first. That is why American can safely exclude its premium products from OTA sites. We expect to see the same action with other sites (maybe even Travelocity?). Other airlines are bound to follow American's lead. The Internet disintermediates any function that becomes unnecessary. And as matters stand, airlines do better selling their premium products than OTA sites."

Ticker: AMR:NYSE

Posted by Holly at 1:48 PM | Permalink | Comments (0)

I don't even know where to start.

A lot of football to talk about before we even get to the things with wings.

As a PBB subscriber reminded me today, I wrote several years ago that the playoff games are usually much more exciting to watch than the Superbowl, and this year has certainly been no exception.

Of course, we have our own dog in this fight this year, and I have to say, I am breathing a bit easier now. Sorry Bears fans, but I think the Philly/New Orleans game Saturday night was between the two best teams in the NFC.

Da Bears? Da Bears? The Seahawks nearly beat da Bears with no secondary whatsoever and a quarterback who, at times, looked like he was on another planet. Or was it just the play calling that was from another planet? (Insert tweaked video of former Coach Jim Mora hysterically exclaiming "Da Bears? Da Bears?" over and over here.)

Of course this has not stopped a couple of PBB Chicago-based subscribers from sending me notes already -- wondering if maybe we should engage in a little "friendly wager" of some type. Okay. I'm game. I'm thinking about what it is I want to win.

Speaking of Chicago -- if almost 7000 fans could not find time to show up at the stadium Sunday for a playoff game, can someone please explain to me why, when the small number of publicly available tickets to the game Sunday do go on sale Tuesday that only people who have credit cards with zip codes from the Chicago area and Indiana are going to be able to purchase tickets online from Ticketmaster?

I have a problem with this.

Maybe I need to call Ed Stewart up and give him an earful. What do you think? You all remember Ed. He was at Southwest Airlines for years. Finally left for the glitter and glitz of LA and Ticketmaster.

Yep. I think Ed needs an ear-thrashing on this one.

But enough Saints-centric discussion. Alas, my previous dream match-up of the Saints/Chargers is now dead meat. Thank you Tom Brady. I'd say Marty-ball is now dead as well. Bye,bye Marty.

Talk about a game that is going to be fun to watch -- the Patriots/Indy game next week is going to be a killer.

Yet again, another Superbowl game before the fact.

Oh, and if you want to know what my mental state was Saturday night, here's an excerpt from the brilliant Times-Picayune columnist Chris Rose who nailed it in his Sunday column.

This football nonsense is a lot more fun when it doesn't matter.

I went to the game last night and -- don't get me wrong -- it was unbelievable to be there and all that, but I've got to level with you: It's a lot easier in the fall.

In the fall, the weather is turning and the air is fresh and when you talk about the Saints or watch the game with your friends, you think: Wouldn't it be great if we got into the playoffs?

In the fall, it's all just speculation and wishing and dreaming and delusional chatter and none of it matters because none of it will amount to anything because it's the Saints and we all know what happens to the Saints in the winter.

We've been at this party for 40 years and our hearts and livers have scar tissue tougher than pigskin and we've got a box of broken promises bigger than Hollis Thomas.

So that's why, in the fall, you can go to a game and if they happen to win, some jughead outside the stadium starts chanting "Super Bowl! Super Bowl!" on the way to the parking lot and you say to the imaginary waitress in your head: I'll have what he's smoking.

It's crazy, talk like that. Crazy is what it is.

In the fall, football is just a game, a pastime, an excuse not to mow the lawn, or an excuse to get out of the house, or to pop an Abita Purple Haze before noon even though it's not just for breakfast anymore.

But in January, it's different. In New Orleans, everything is different. Since the flood and all the bad stuff that washed in but not out, everything is different and up is down and cold is hot and brown is the new black and how the hell did we get to the point where it actually mattered if the Saints won or lost a game?

.......Surely it's a dream. Right? But you don't feel pain in dreams and, man -- this one nearly killed me.

I mean, one minute it's 3-zip and it feels good and then it's 6-zip and it feels good and then 7-6 Eagles and this sucks and then 13-6 Saints glory hallelujah and then 14-13 and then 21-13 and then 21-20 and all I can think is: This is a lot more fun when it doesn't matter.

And then it's 27-21 and then 27-24 and then all I want are my cyanide capsules, push me in front of the train, just shoot me, would somebody please tackle Westbrook -- what the hell's the matter with you guys and, oh yeah -- it's only a game."

Yep. I wanted those same cyanide capsules when Reggie Bush mishandled that pitch in the fourth quarter.

Bring on da Bears.

Posted by Holly at 1:20 PM | Permalink | Comments (0)

Northwest unexpectedly filed its reorganization plan today with a federal New York bankruptcy court.

It was somewhat unexpected in that the plan was not due until Jan. 16. According to the airline, the plan was filed ahead of the deadline in an effort to avoid "interference" from "outside parties."

Hmmm. Okay.

Another interesting aspect of this filing was that while the basic plan was filed, the more detailed disclosure statement was not filed.

That is where the nuts and bolts details of the airline's plan are more clearly spelled out. Especially in reference to how it plans to pay its creditors.

However, because the airline has not yet filed its disclosure statement, a merger or other deal with Northwest is still a possibility.

Northwest's plan gives it the option to raise money by selling equity in the restructured company and possibly raise capital from private equity firms. The company also plans to convert its existing bankruptcy financing into new forms of debt.

The new debt would include a $175 million revolving credit facility and a $1.05 billion loan, including a $75 million letter of credit, each with a maturity date of August 2013, the airline said.

And, as we all expected, existing shares of the airline will become nothing more than wallpaper.

Posted by Holly at 8:07 PM | Permalink | Comments (0)

Guys are here to pick up dead trees that were recently cut down in our yard -- an ongoing result of you-know-what. (Begins with a K, ends with an A.)

More airline ruminations a bit later.

Posted by Holly at 2:18 PM | Permalink | Comments (0)

In going over the news today, a couple of newsy things of interest involving the things with wings caught my attention.

Probably the most intriguing was the news that American Airlines is going to pull all of its first class and business class fares, and all of its international fares from Expedia. Effective immediately.

Only U.S. domestic coach tickets will now be sold through Expedia.

An American Airlines spokesperson was quoted as saying, "We have to make sure that all of our distribution channels are efficient and cost effective ... This is just another step in working toward that goal."

Somebody is not happy with somebody. Or something.

But what intrigues me about this is, first, what's the reasoning here, and two, will other airlines follow suit? Or is this a one-shot deal? What about other online distribution sites? Is there some trial run going on here that is going to spread to other sites? Other airlines?

If I were going to make a guess here, I would guess that this means American sells so few of their higher-end tickets on Expedia, that it feels it is not worth it. But international travel? I'd think the airline would sell a fair number of international tickets on Expedia.

I want more information on this one.

Posted by Holly at 1:48 PM | Permalink | Comments (0)

Well, not those Feds.

Southwest Airlines chairman Herb Kelleher was named Thursday to the board of the Federal Reserve Bank of Dallas for a one-year term.

Each regional Federal Reserve bank has a nine-member board that includes representatives of commercial banks, the public and members appointed by the Board of Governors in Washington.

Alright Herb! The Dallas Fed could probably use a little levity these days.

However, I don't think they allow smoking in those Fed meetings.

This could pose a problem.

Posted by Holly at 1:40 PM | Permalink | Comments (0)

Pardon me while I take a moment to bask in the hysteria that is New Orleans today. Tomorrow will only be worse. Or better -- depending upon your point of view.

And trust me -- chances to actually feel good about something in this part of the world are few and far between. So excuse my overt enthusiasm for what, in other parts of the world, would be viewed as just your normal run-of-the-mill NFL playoff game.

Not here. Here it is a chance for people to forget the otherwise depressing story of New Orleans. It's a chance to shift gears, change the channel, go to another planet. Bask in something that feels good -- not bad.

Yesterday, thousands of city residents marched on City Hall out of frustration and anger at the city's total lack of leadership in addressing the city's mounting crime problem. But today, it's time to forget all about that. If only for a day. Or two.

Yep, living in New Orleans these days is not easy. I'm not sure what it is, but one thing I do know is it requires a lot of flexibility, stamina, and well, a schizophrenic personality probably doesn't hurt.

But today the countdown to the NFC playoff game against the Philadelphia Eagles begins in earnest.

Tomorrow night it will culminate in a wild frenzy of black and gold clad fans, all of whom look to the Saints success this year as a hopeful metaphor for their own rebirth and restoration.

Kick-off is at 7.

I'm off to find my bloody mary.

Posted by Holly at 1:17 PM | Permalink | Comments (0)

Oh, hi there.

It's just us. We're up late tonight. How 'bout you? Thought we'd pretend like we worked for an airline that is considering a deal for another airline. And stay up all night.

Heh.

Okay enough goofiness. This week's PlaneBusiness Banter is now ready for perusal. Subscribers can access this week's issue here.

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

Not to be outdone by US Airways' "sweetened deal" move on Delta Wednesday, Thursday morning it was disclosed that AirTran has sweetened its own hostile bid for Midwest Airlines.

AirTran is now offering to purchase Midwest for about $345 million, an increase of about 18% over its previous offer.

The new offer is the equivalent of $13.25 a share, based on the closing price of Midwest stock on Monday. It's also a 3% premium on the closing price Wednesday. It's also just about where most analysts and observers had estimated AirTran would have to move to -- if the airline was to have any chance at forcing a deal.

The Midwest board of directors voted "no" in early December on AirTran's initial offer of $11.25 a share.

Not surprisingly, this time Joe and the folks in Orlando took the deal directly to Midwest's shareholders, completing ignoring the airline's board of directors, which has been loathe to discuss a potential merger with AirTran.

According to Joe Leonard, AirTran CEO, "We thought we'd let the owners decide."

The deal expires on Feb. 8.

My thoughts on this one? I'm not convinced this is as good a move for AirTran as the airline has put forth.

Having said that -- at $13.25 a share -- this offer is clearly in the range of being one that just might be too good for the larger institutional shareholders of Midwest to pass up. Don't think that AirTran management has not been in direct contact with them and therefore feel they have a good sense of what it is going to take to get these guys onboard a deal.

I don't think there's any question this is going to bring intense pressure from those shareholders towards Midwest management.

And hey -- at some point the members of the Midwest management team has to start looking at what they would get out of this deal -- and start to think about how nice it would be to see all those dineros in their bank accounts.

Having said that, from an airline standpoint alone -- this one is really not a potential match-up we like. I understand why AirTran wants to do it -- I'm just not sure it's going to work out very well for them in the long term -- for a number of reasons.

Tickers: MEH:AMEX,AAI:NYSE,LCC:NYSE

Posted by Holly at 10:46 AM | Permalink | Comments (0)

No surprise here.

MarketWatch reports tonight that the Unofficial Committee of Unsecured Claimholders of Delta Air Lines has officially urged the airline to "provide thoughtful and unbiased consideration" to the new bid from US Airways.

The committee said it believes the best interests of shareholders will be served if Delta takes steps such as providing "reasonable and customary access" for US Airways to perform due diligence, and postponing Delta's Disclosure Statement hearing scheduled for Feb. 7 to allow Delta to fully evaluate US Airways' proposal.

Posted by Holly at 8:10 PM | Permalink | Comments (0)

Before we left on our holiday hiatus, we mentioned in PBB that we thought the next "major" news we would hear concerning a potential merger link-up would involve Northwest.

Well, sometimes things take time to come to fruition.

Today the Wall Street Journal is reporting that the two airlines are discussing a potential merger, perhaps "after bankruptcy."

Not sure why they would want to wait -- but that is the word this afternoon.

As for the logistics of such a deal, analyst David Strine with Bear Stearns wrote in November,

"All told, the combination would create a massive airline with global reach, better able to harness the power of the SkyTeam alliance as both DAL-Air France and Northwest-KLM separately have transatlantic anti-trust immunity., While the international networks are reasonably complementary, there is no domestic overlap between the carriers' top 20 city pairs. Further, the fleets have one plane type in common and nine that differ. Finally, the pilots are both represented by ALPA, and none of Delta's other major [employee groups] is unionized, a potential boon for Northwest. "

Posted by Holly at 2:31 PM | Permalink | Comments (0)

Monday we wrote about the additional financial heft US Airways had put in place as it was announced Morgan Stanley had been added to its merger finance team. Today, as expected, that increased financial heft manifested itself in a "sweetened" deal for Delta Air Lines.

US Airways this morning raised its bid for Delta from $4 billion and 78 million shares to $5 billion and 89.5 million shares. Terms of the deal? The new offer will expire on Feb 1 unless US Airways receives creditor support for the commencement of due diligence, there is an HSR filing, and the currently scheduled Feb. 7 hearing on Delta's disclosure statement is postponed.

Gary Chase, analyst at Lehman Brothers wrote this morning, the "new deal terms [are] very much in line with current bond prices which had advanced well beyond initial LCC deal terms. Offer value is $10.2 billion based on last night's close to a comparable Delta stand-alone valuation, in our view, of $8-9.5 billion."

Ticker: LCC:NYSE

Posted by Holly at 10:51 AM | Permalink | Comments (0)

The DOT made it official today. It awarded the new China route to United Airlines.

United was granted the right to fly its proposed "capital to capital" service from Dulles to Beijing. US Airways supported the United proposal. Continental, Northwest and American had also applied for the right to fly the route, but, as you may recall American's proposal was amended in December. The DOT ruled the change to the airline's proposal came too late and was too great -- therefore American's revised proposal which had it flying one-stop from DFW to Beijing, via Chicago, was not even considered.

The tentative order can be found here.

Ticker: UAUA:Nasdaq,LCC:NYSE,CAL:NYSE,AMR:NYSE

Posted by Holly at 1:56 PM | Permalink | Comments (0)

We knew it was going to be ugly, and yep, it is.

Frontier issued its December traffic release tonight.

Revenue passenger miles decreased 2.2% to 606,723,000 for December 2006 from the same period last year. Available seat miles increased 1.7% to 889,373,000 for December 2006 from the same period last year. This resulted in a load factor for December 2006 of 68.2%, a decrease of 2.7 points from December 2005, when the airline reported a load factor of 70.9%.

CEO Jeff Potter added the frosting to the mess that is going to be the airline's financial result for December, as he added in the release,

"December passenger revenue performance was negatively impacted by approximately $11 million due to two major December snowstorms, one of which completely shut down our primary hub, Denver International Airport (DIA), for almost 48 hours," said Jeff Potter, President and CEO of Frontier Airlines. "In addition, while we are unable to provide a definitive snowstorm cost estimate at this time, we do anticipate that there will be significant variable expenses, such as glycol expense ($1.1 million in storm related costs), partially offset by variable costs we didn't incur while the airport was shut down. Combined with these net additional storm related expenses, our loss of storm related available seat miles (ASMs) in the December quarter will result in higher unit costs than previously anticipated."

Ticker: (FRNT:Nasdaq)

Posted by Holly at 10:47 PM | Permalink | Comments (0)

Liz Fedor at the Minneapolis Star-Tribune has a good update on all the many issues going on with MAIR, Mesaba and the proposed sale of Mesaba to Northwest. Article was posted about an hour ago.

Posted by Holly at 10:38 PM | Permalink | Comments (0)

The Ohio State Band was just on at halftime playing the theme from "Titantic" -- complete with the band creating the outline of a sinking ship and marching under a blue tarp that ran the length of the field.

Now there is a band director with real vision.

Posted by Holly at 9:38 PM | Permalink | Comments (0)

Figures. This is what I get for even suggesting the SEC dog in this fight was going to come up short.

Posted by Holly at 9:10 PM | Permalink | Comments (0)

Okay, so APA President Ralph Hunter suggested, "We Know Why You Fly and We Just Don't Care," but I like our shortened version better.

The fallout continues over the debacle that was American Airlines' operations on Dec. 29.

While those of us in the industry certainly knew a lot about the airline's operational meltdown -- a result of a non-ending series of storms that moved south to north on that day -- and a series of mistakes made one on top of another, it never helps to have your mistakes plastered across the pages of the Wall Street Journal. (Sub required) Then everyone finds out about it.

Granted, all airlines suffer from operational issues. Northwest passengers endured their own marathon on a plane a couple of years ago. I was part of the legendary September meltdown a few years ago at O'Hare that saw me sit on a diverted United plane in Indianapolis for 6 hours.

But I have to admit, I think Scott McCartney hit some nerves with this article.

While the article details many mistakes on the part of the airline, the most damning part of McCartney's story is that even after passengers had been stuck on the ground in a plane for hours and hours in Austin -- when they finally did get off the plane, there was little special effort on the part of the airline to take care of them. There is simply no excuse for that.

Much less were there any apologies offered by the airline. As McCartney wrote,

"American's [PR flack] Mr. Hotard says the airline is truly sorry for the mess. He says one reason the airline may not have contacted customers to apologize is that its Fort Worth headquarters, where customer-service specialists work, was closed for four days over New Year's."

No excuse.

Would we hear JetBlue say something like that? Or Southwest?

I highly doubt it.

Posted by Holly at 7:22 PM | Permalink | Comments (1)

Is it just me or is this long delay before we finally play the National Championship game now gotten way out of whack? I think so.

I think the game tonight should have been played last Friday night.

This is ridiculous.

Posted by Holly at 5:15 PM | Permalink | Comments (0)

In case the brain trust at Delta had the idea that the folks at US Airways were going to pack up their tent to begin 2007 and go elsewhere -- it doesn't look like that is going to happen. Just the opposite.

Monday, US Airways added Morgan Stanley to its stable of financial backers for the proposed $7.2 billion debt deal. Morgan Stanley joins Citibank in agreeing to provide financing for the deal, although, according to the Financial Times, Morgan Stanley will not, apparently, be acting in an advisory capacity on the deal. In addition, the airline received permission to bring on a third financial entity to the mix, if necessary.

This is the equivalent of dragging out the heavy artillery folks. Never hurts to have more financial firepower than you need, and it would seem US Airways has now beefed up its financial resources sufficiently to increase its offer for Delta, if the need arises. It also shows the clout and support this deal has on the Street.

Meanwhile, over Christmas, it was announced that Delta's creditor committee had hired former Continental Chairman and CEO Gordon Bethune to advise them on the deal. Reuters reported today that Bethune met with the committee today and that he is also scheduled to meet with them on Wednesday.

Interesting. Delta and Gordon. You may recall that it was Continental management who accused management at Delta of suffering from "box of rocks" thinking in a previous round of merger mania a few years ago.

Posted by Holly at 4:45 PM | Permalink | Comments (0)

This week's issue of PlaneBusiness Banter is now posted. Subscribers can access it here.

Posted by Holly at 6:20 PM | Permalink | Comments (1)

Beats me. It's a drop-dead gorgeous day here today. No more nasty weather. Now you guys in Atlanta can have fun with the stuff.

All I have to say is if something goes awry next Thursday -- that's it. I'm calling Mayflower.

We're back at the post -- I'll talk to you all later when we post this week's issue of PlaneBusiness Banter. Until then -- try to behave.

Posted by Holly at 10:08 AM | Permalink | Comments (0)

Crap. I'm getting tired of this stuff. In December we had our phone lines cut by the power company as we were trying to publish. Tonight, we've got weather. Nasty, nasty, weather. Like tornado warnings, wind, lightning, rain. Whatever. I wouldn't be surprised at anything.

So we've had a quick executive meeting here at the Worldwide Headquarters in the last 10 minutes and decided to play it safe. I have to admit -- even though we have UPSs on all our machines -- I had a processor fried to a crisp in Dallas from a nasty thunderstorm once. Came right in the cable modem line. So I have a healthy respect for such things.

Unfortunately there's not much we can do offline, as all our copy is on the server and in the process of being edited.

We'll find something to do. Like maybe sleep.

See you guys tomorrow. The worst of these squall lines should be gone by the morning.

Ciao.

Posted by Holly at 9:45 PM | Permalink | Comments (0)

Hi guys. It's Thursday. You know what that means. Yep, it's writing day for us at PBB. While not everyone is fully back and functioning this week (it'll be next week before I think everyone finally shrugs off all this holiday hangover), we will have an "end of year, first of year" issue out this week.

Talk to you later.

Posted by Holly at 4:55 PM | Permalink | Comments (0)