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June 29, 2007
June 28, 2007
iPhone Mania
Okay, so did any of you sit, stand, or crouch in line for days to get an iPhone? Go ahead. I won't think you were (are) nuts. Amazing. A friend of mine was outside the Apple Store in Manhattan about an hour ago and wrote me a note about what a zoo it was.
Just amazing what gets people excited these days.
Oh, hey, and just for the record. No, I lust after one as well. But I'm going to wait. Oh, wait, that reminds me. My two-year cell contract just expired.
Hmmmmm.
Let me get back to work. This week's issue of PlaneBusiness Banter will be posted later tonight. Let me get back to the final edits.
Talk to you in a few.
$70, Do I hear $70 a Barrel?
Oil hit more than $70 a barrel today in trading, but as of my last check, it looks like it is going to close the day just under the psychologically important number. Last time I looked it was at $69.57.
Delta Wants It Both Ways
From two different press releases from Delta Air Lines today:
Press Release Number One: "Delta Air Lines is working with customers booked on flights traveling to or from select cities in the Northeastern U.S. to make adjustments to travel schedules in preparation for severe summer weather expected in the region later today. <snip> Delta's focus is always the comfort and safety of our customers and we will continue to work to mitigate ongoing air traffic control-related congestion and delays. However, today's storms are another example of why it is critical that Congress act to modernize the nation's air traffic control system,'' said Joe Kolshak, Delta's executive vice president and chief of operations. "It's fundamentally unfair to our customers that we are operating in a system that was built in the 1940s and can't accommodate today's air travel demand without costly and frustrating delays and congestion that are beyond our control. The FAA has presented a plan to Congress that helps ensure airline passengers are provided with an updated, 21st century air traffic control system. We urge Congress to approve the FAA's plan to increase airspace capacity, especially in the Northeast, and to get away from the status quo and act boldly to modernize our nation's outdated air traffic control system.''
Okay, so we not only have a warning about bad weather, more or less blaming ATC for today's potential delays, but an advertisement for the FAA funding bill. Nice.
Press Release Number Two: Delta Air Lines will continue its successful international expansion from New York's John F. Kennedy International Airport with five new nonstop flights to Central America and the Caribbean. The new flights are scheduled to begin between Dec. 13, 2007 and February 2008, and mark Delta's largest expansion into the region from New York.
Translation: The system may be overcrowded, especially at JFK, but by God, our continued expansion there has absolutely nothing to do with it.
It's entirely the ATC's fault, remember?
Ticker: (NYSE:DAL)
Gary Kelly Is Just A Big Tease
Well, if I thought Southwest Airlines was going to give more details on just what they are going to do in regard to seating and boarding procedures, (which was highlighted in their press release), or that they were going to give more details about how they are going to go about attempting to "woo more business travelers," in the meeting with analysts or in the press conference later, I was sorely mistaken.
Or, as Dan McKenzie, analyst with Credit Suisse said in his research note this morning, "Mgmt was purposefully vague & simply offered to release more details later this year."
As McKenzie noted, Southwest CEO Gary Kelly said yesterday that the airline is: committed to adding $1 billion in ancillary revs/yr by 2010 (but didn't say how); slowing growth in 08 given a more cautious economic outlook (now 19 net deliveries vs. 34 previously); more upbeat about summer traffic trends; planning a new scheduling initiative that should result in better profitability; committed to more share repurchases; & continuing to target a 15% profit margin.
One good piece of news that came out yesterday on a local level for those of us still hanging on in New Orleans. Southwest is upping its flights from New Orleans to a number of destinations. More flights, especially nonstops, to anywhere, are much appreciated.
In looking over the list of flights Southwest is beefing up -- it's clear that as we had said earlier both here and in PBB, after it was clear a number of longhauls were about to be whacked -- it appears the airline is adding capacity to shorter-haul flights. And to Denver. Wow -- that big increase in service out of Denver cannot be good news for the folks at Frontier.
Ticker: (NYSE:LUV), (Nasdaq:FRNT)
June 27, 2007
Southwest News Conference Today
The pre-press conference release is out on today's upcoming analyst and press conference with Southwest CEO Gary Kelly.
According to the release,
"The airline will slow its fourth quarter 2007 available seat mile growth and optimize its flight schedule. In addition, Southwest announced it now plans to grow its fleet in 2008 by 19 net aircraft, 15 fewer than was previously reported. Kelly said slowing capacity growth will allow the carrier time to implement and evaluate the effectiveness of several initiatives Southwest intends to launch in fourth quarter 2007.Unveil a new boarding/seating method? OMG! NO! Tell me this isn't so! ;-(
"Given the slowing U.S. economy and fuel cost pressures, we are taking these steps to adjust our capacity growth rate, which will help to restore profit growth," Kelly said. "If we find that conditions change, we will reevaluate our growth plans for future periods. In this economic environment, we simply need to take less risk and grow more slowly."
"For both fourth quarter 2007 and full year 2008, we currently plan to grow available seat miles (ASMs) year-over-year by approximately six percent, or about two percentage points less than previously reported. We also plan to implement a variety of revenue-enhancing initiatives by the end of 2007 that set the stage for continued profitability into the future," he said.
During fourth quarter 2007, Kelly said Southwest plans to:
* Slow its available seat mile (ASM) growth to approximately six percent
* Enhance its low-fare structure
* Enhance its Rapid Rewards frequent flyer program
* Launch a new advertising campaign
* Unveil a new boarding/seating method"
Kelly is holding a press conference/analyst call today at 12 noon Herb time (CDT). The call will be available as a webcast shortly thereafter on the airline's website.
Unfortunately yours truly will be on her way to the airport at noon, dropping off my niece so she can catch her flight on ....Southwest Airlines back to Tampa. Ms. Haley came in to visit with her grandmother Monday. I think PlaneMom was the happiest I've seen her in months yesterday. Granddaughters have the ability to make that happen.
Good stuff. PlaneMom deserved a nice surprise.
But no question -- as soon as I get back to the Worldwide Headquarters this afternoon, I'm pulling up the webcast of the press conference and taking a listen.
Talk to you guys later. Try to behave in the meantime.
Ticker: NYSE:LUV
June 26, 2007
Duh
Well it looks like my earlier posting with the graphic from the Simpsons was spot on. Duh. Shows what I get for being in a hurry this morning to get out of the Worldwide Headquarters.
While the press conference concerning the new service out of DFW is tomorrow, it was not today, the Ft. Worth Star-Telegram has the news. And it is what we had expected.
Tomorrow we should hear that British Airways is going to move its nonstop that currently flies from DFW to Gatwick over to Heathrow.
The new service will start after the new EU/U.S. "Open Skies" agreement kicks in -- in March of next year.
That's the Only Way I'll Fly
Okay boys and girls -- check out this link sent to us from a reader concerning the new airline sponsor of the Conan O'Brien Show.
Tuesday Turns
Just wanted to check in briefly. I am literally out the door here in a minute or two. I'm a bit involved with family stuff today (and probably tomorrow), so don't take it personally if I am a bit scarce. I'm not dissing you.
Meanwhile, I'll be interested to see what DFW's big announcement is regarding new international service this afternoon. I would think it has to involve British Airways since the announcement is being made from the UK, and not even Dallas. (Duh, a really good guess, eh?) Then again, there's always Virgin. Nah.....
Other than that, keep cool, fly safe, and I'll check in here later today to see what's been going on.
June 25, 2007
More on the Northwest Cancellation Issue
A PlaneBusiness Banter subscriber sent us more information concerning the problems at Northwest today. Here's an excerpt.
"There is anecdotal evidence that up to 1500 flights have been cancelled within a 2 week period. Crews are being rescheduled left and right and called at home on days off. Apparently there is a memo that has been sent to gate agents to tell passengers that flights are being cancelled for weather as opposed to crew shortages. Also some flights are being cancelled well ahead of schedule and showing up in the reservations system as a code other than crew shortages. All this going into our busiest, most profitable flying months.Just my own personal two cents here.
The shortages are due to too many pilots being laid off during Ch11, and being called back too late and too slowly. One thing this shortage is NOT being caused by, and that is crews refusing to fly higher than normal hours. In fact crews are flying close to FAA limits, and many cancellations are occurring due to crews “timing out”. Many of the pilots commute to work and are have difficulty getting to base due to flight cancellations, adding insult to injury."
I do know that when I was locked into LaGuardia two weeks ago -- Northwest was cancelling flights left and right, while Delta and other carriers were only spot cancelling.
Ticker: NYSE:NWA
June 24, 2007
Northwest Feeling Pinch of Crew Shortages
We are not usually prowling around in here on Sunday nights, but in checking the email tonight I noted a couple of notes from readers, including the irrepressible Scott McMurren up there in Alaska, along with an email advisory from Joe Brancatelli from earlier today. It seems that Northwest Airlines has canceled a lot of flights this weekend -- and Joe was advising folks to check on their flights before leaving for the airport.
According to FlightStats, on Friday, the airline cancelled 100 flights. On Saturday, it cancelled 159 flights, or 12% of its schedule. Sunday, as of 8:50 p.m. CDT, the airline had cancelled a hefty 190 flights. or about 16% of its schedule.
Sent out a few notes to some Northwest folks we know, and yes, they all are confirming to us tonight that the airline has had to cancel flights because they simply don't have the crews to fly them.
And we have almost a whole week left in June.
While we can pretty much bet the farm this isn't the only airline that is having these problems, Northwest does seem to be having the worst case.
The flight attendants and the pilots have been telling Northwest for months that there were going to be crew shortages this summer.
Well -- here we go.
June 22, 2007
Update on FAA Advisories
Thanks to Brett Snyder, aka Cranky Flier, who just let me know that because I pulled up the FAA status page in Firefox, that is why all the airports pop up orange. He alerted me to the fact that the page will not work properly in Firefox. Apparently the last time I used the page I accessed it in Safari, because it functioned correctly.
The things we learn.....right?
So having said that -- things are that bad this afternoon. Maybe I'll go fly somewhere.
But not to the Northeast and not to Dallas. Looks like there is nasty weather in Dallas, and the usual gridlock in the Northeast.
Oil Prices Looking Ugly as Well
Oil prices were up again today as fears of the effect of a Nigerian strike against oil producers caused traders to come down with a case of the nervous jitters. Oil was up almost 50 cents on the day, closing at 69.14 a barrel.
Word to the wise. Don't get used to those lower prices at the gas station. They aren't going to stay there for much longer with oil moving up as it has been for the last two weeks. Remember -- there is usually a lag time between rising oil prices and higher gasoline prices.
Friday Afternoon Looking Ugly Again
This map only looks good if you are a Big Orange fan of Tennessee or a Texas Longhorns fan. Nothing but orange. And as we all know, the only worse possibility is nothing but red. I guess we should be happy for small favors. I'm still glad I'm not on a plane today.
AirTran Pilots TA Vote Postponed
There was some interesting news out today concerning the tentative agreement between AirTran and its pilots.
While all TAs are important, this one has a little more behind it, as the airline and the pilot group don't want to to into a potential merger situation with Midwest with no contract in place.
Apparently the National Pilots Association was in the midst of doing their road shows and talking to their membership and it became pretty clear that the rank and file were not going to vote to accept the TA.
Rather than go to a vote and an inevitable demise, the union and the airline have instead now postponed the vote, and both sides are going to be meeting under the watchful eye of the National Mediation Board next month in Washington, in an attempt to work out the issues that members of the union have cited as being the most objectionable.
Good for them. This is a decision that makes sense. Unless there's more to this story that I don't know about.
Lav Situation Cleaned Up: PBB Posted
Subscribers to this week's issue of PlaneBusiness Banter can now access it here.
PBB ETA 1:45 CDT
Unless we hit a ground stop.
Be back soon. :-)
June 21, 2007
PlaneBusiness Banter Posting Update
Hey guys. We're going to post PBB tomorrow. But it won't be late in the day. We're just trying to get a few things nailed down -- and I need to wait until normal people are up and answering their phone or their email.
I'll update everyone here when the issue is posted.
Thanks!
Ah, How I Love the Smell of Sewage in the Cabin
By now you've all probably heard of the crappy experience (and I mean literally) that 250 passengers on a trans-Atlantic Continental Airlines' flight had to endure last week.
Thanks to CrankyFlier, who let me know there was a first hand account from a passenger online. To read the missive, you can click here. This photo was taken by a passenger on the aircraft -- yes, that is backed up sewage coming down the aisle. Coffee, tea or pee?
The worst part? These folks were herded off the original flight and forced to spend the night -- then re-herded onto the same aircraft, which then developed the exact same problems shortly after taking off.
While I did have a pretty bad lav experience on Chicken Taco (Chautauqua for those not PBB subscribers) last week, it was nothing compared to this.
Ticker: (NYSE:CAL)
Follow Up on Changes in Southwest's Routes
For those of you interested in this subject that we talked about earlier this week, I wanted to let you know that the airline has scheduled an analyst/investor update session in New York next week -- on June 27. The date coincides with the airline being listed publicly on the NYSE for 30 years -- in case anyone is a real history buff and into those types of nifty pieces of information.
Because of the time frame in which the airline will be loading up its new schedules in its system (which also just happens to coincide with this date), expect to see some news from the airline about the changes next week.
Also, this meeting with CEO Gary Kelly and the analysts will be webcast.
June 20, 2007
From the APA Hotline: Final Tallies
The APA Hotline just gave us the final numbers on the election:
"For President, Captain Lloyd Hill received 4,573 votes and Captain Ralph Hunter received 2,180 votes.
For Vice President, First Officer Sam Bertling received 2,068 votes and Captain Tom Westbrook received 4,665 votes.
For Secretary-Treasurer, First Officer Jim Eaton received 2,723 votes and Captain Bill Haug received 3,986 votes."
Not as close as I had thought would be the case.
Just a side note. The new officers don't have much time to slack-off. They take office effective July 1.
Oh boy -- this should be interesting.
APA Election Results: Hill Defeats Hunter
Here you go. Here are the final results for the APA elections. All three candidates on the Unity2007 ticket that included current President Ralph Hunter were defeated.
President – Lloyd Hill
VP – Tom Westbrook
Sect/Treasurer – Bill Haug
Ticker: (NYSE:AMR)
APA Vote Update
From an American Airlines' pilot reader we hear that with DFW and ORD votes still out -- challenger Lloyd Hill is about 1900 votes ahead of current APA President Ralph Hunter.
If this count is correct it would mean that Ralph would have to carry both domiciles with about a 90% vote.
Don't think this is going to happen.
We'll keep you posted.
Feds Back Off Again from Passport Requirements
The Bush Administration will now delay for at least six months the implementation of a new rule that U.S. citizens must present a passport when crossing the U.S. border by land or sea, officials announced today.
Starting in January, land and sea travelers returning from Canada, Mexico, the Caribbean, and Bermuda will be allowed to present a birth certificate and driver's license in lieu of a passport.
The modification is expected to last at least until the summer of 2008, when officials hope to require passports or similar documentation at all land and sea crossings. Are we taking bets on the summer 2008 date?
The reason? We all know the reason. The government is still back-logged trying to meet current demand for passports -- as a result of the change requiring people to produce a passport when flying back from the aformentioned countries.
Most amusing comments from the a Senate hearing Tuesday on the current passport mess? Maura Harty, assistant secretary of state for consular affairs, took the blame for the passport mess, saying that part of the problem was that in 2005 Hurricane Katrina reduced the capabilities of the agency's New Orleans passport office. Right. The office in New Orleans has been up and running for more than a year.
But the best excuse was this one: She also said the agency had not expected so many Americans to actually obey the new law.
I have no comeback for that one.
Anyone in Memphis? Go Check Out the Antonov AN-225 freighter
I'm going to see this thing in person one of these days. Just not today.
But for those of you in Memphis, the lone AN-225 freighter is flying in today from Gostomel in the Ukraine. As of 4:30 CDT, the aircraft is now projected to land at about 5:15 CDT.
For those of you who have never seen this wonder of aviation, here's a shot from the Paris Air Show this year.
The huge Ukrainian transport plane, the largest airplane in the world, has a wingspan of nearly 300 feet - the length of a football field.
Could it Be? Is Ralph Hunter Going Down to Defeat?
I feel like one of those people who ask "Who did you vote for and why" today.
I've been getting a great deal of feedback from American pilots today in regard to who they voted for and why in the APA elections. And I have to say, at this point, I don't think it looks good for incumbent President Ralph Hunter.
And, if that is the case -- then, as one reader commented -- American management will be the big losers. But they will be losers of their own making. Because it was American management who, as he put it, "Whacked Hunter's legs out from under him and left him standing naked in the storm."
I think that is a very astute observation.
Final vote count should be out this afternoon.
Ticker: (NYSE: AMR)
Unimatic
For those of you with enquiring minds, apparently the exact cause of the meltdown this morning at United was a failure of the Unimatic computer system. (Hope that answers one reader's question!)
Ticker: (Nasdaq:UAUA)
Plan to Fly Today on United Airlines? Have Fun
United Airlines' flights were grounded across the country for hours this morning because of a computer failure.
Reports say that the computer system, based in Chicago, which calculates weight and balance for departing flights shut down. At one point this morning there were only five United flights in the air, according to several media reports.
United now reports that the system is back up and flights are back up in the air, but "delays are expected to continue throughout the day."
Ahhh, I'd say that might be a little optimistic considering that the entire United fleet was essentially grounded for more than two hours this morning. If I were you, I'd just cancel that flight and tell your business partners you'll see them when United can reschedule you.
Ticker: (Nasdaq:UAUA)
Southwest Cutting Capacity In Some Long-Haul Markets
Analyst Gary Chase with Lehman Brothers says today in a research note that Southwest Airlines appears to be cutting capacity on some of its long-haul routes -- beginning this fall.
Chase notes that Southwest has stopped selling seats on a number of longhaul markets effective in October. As Gary notes, "We can't be certain that Southwest intends to make changes, but the move would be consistent with recent company comments to address under-performing markets in upcoming schedule changes."
Gary says that Southwest has made seats on a number of longhaul markets unavailable beginning October 4th, including all nonstop flights from Baltimore to Los Angeles and Oakland, and Philadelphia to Los Angeles and Oakland. "We've identified similar activity in a number of other markets, including longhaul markets with frequency reductions (such as Phoenix to Providence, with 1 of 2 daily flights unavailable for purchase)," Chase added.
Who would could possibly benefit from such moves? Gary says that the largest beneficiaries could be US Airways or United, with some minor positives for American and Continental. However, clearly it's not known at this time where Southwest will redeploy the capacity, although one has to assume it is going to be on existing routes -- and perhaps those of a shorter-length.
Ticker: (NYSE:LUV)
June 19, 2007
Big Day Tomorrow for Union Politics: APA Election Results Due Wednesday
Late tomorrow afternoon we should know which platform of candidates will lead the Allied Pilots Association for the next three years. The APA represents the pilots at American Airlines.
To say that this is a huge election is the proverbial understatement. Whoever is elected will preside over one of the most contentious contract negotiations in the industry -- the first of many such negotiations slated in the next two years.
Will Ralph Hunter manage to hang on to the President's position?
I have talked to those on both sides over the last two weeks, and I can honestly say -- this one is too close to call. I rarely say that -- although I did in the recent Northwest flight attendant vote.
But this one -- yep. It's too close to call. And frankly, that's not good for Ralph Hunter.
In the primary vote, only 58% voted of the eligible pilots voted. But Ralph only got about 1400 votes. The group of challengers to him received about 4500 total. (There were three challengers including Hill.)
It's a pretty easy election to dissect however -- as many pilots who are not happy with the current situation at American tend to blame Hunter for having been too close to management over the last three years. For them, it's a case of "change is a good thing, no matter what it is." Hill is campaigning to this unhappiness by promising to be much more aggressive with management at American.
But those on Hunter's side believe that Lloyd Hill is a loose cannon -- and not the type of person they want in the office at this particular point in time.
We'll have the final numbers here tomorrow.
Ticker: (NYSE:AMR)
June 18, 2007
Speaking of Boeing -- Who You Gonna Believe on the 787 Roll Out Schedule?
As Reuters noted in a story this morning, should we believe Boeing or a Wall Street analyst?
"Boeing's (BA) closely watched 787 Dreamliner plane is up to four months behind schedule, according to a JP Morgan analyst note circulated on Monday.
"We believe that the 'power on' to the aircraft was scheduled for April 21, but is now scheduled for August 15, and even that date is considered a bit of a stretch by some suppliers," said JP Morgan analyst Joseph Nadol in a research note, citing unnamed suppliers on the 787 program.
The head of Boeing's commercial airplane unit, Scott Carson, said earlier on Monday that the plane was still on schedule for roll out in July and test flight in August or September. He said it would be delivered on time to the first customer in May 2008."
June 17, 2007
US Airways Apparently Sticking with Airbus
Bloomberg reports tonight that it appears US Airways is going to stay with Airbus, and not make the switch to Boeing.
"US Airways Group Inc. plans to order at least 90 Airbus SAS aircraft valued at more than $10.7 billion to replace planes and add long-range jets, a person with direct knowledge of the sale said.
US Airways will purchase about 60 single-aisle Airbus A320 aircraft, eight wide-body A330s and 22 long-range A350 XWB jets, said the person, who asked not to be identified before today's announcement at the Paris air show. US Airways, the seventh-largest U.S. carrier, chose the Airbus planes over Boeing Co.'s 737 and 787 Dreamliner models after months of negotiations."
Ticker: (NYSE:LCC)
June 15, 2007
PlaneBusiness Banter Now Posted
This week's issue of PlaneBusiness Banter is now posted. Subscribers can access this week's issue here.
So Take That You Northwest Person....
From a posting impaired reader:
"To the person who wrote the first email . . . either you're an NW employee preparing to testify to the judge or you're smoking something reeeeaaaalllly good.
NW did NOT find an underserved market here that they think has profit potential. This is simply a slap back at AA and nothing more.
AA has a legitimate market reason for flying to MSP since they have a large NYC presence, but NW won't have any of it. And that's how we got where we are today."
More Readers Chime In on the Northwest/American Slap Down
I can see the flood gates have opened. It's good to see some things never change.
First email received:
"Holly,
While a cute observation by the author, this “mine is bigger therefore better” analogy is off the mark – the real question is what are the load factors on those routes and is there room for extra capacity? If NWA can fly full airplanes from DFW-LGA and make a profit good for them, ditto AA to MSP. It is not necessarily an “us or them”.
I must say the author’s comments do accurately reflect the typical “Sky Nazi” view of the airline world……"
Ouch.
Second email received:
"Gee Holly -
At least we have something else to talk about now that the Sopranos is over.
I can see Tom Bach up there in MSP screaming, "Those f**ks in Dallas have NO RESPECT for NW in MSP. Let's teach them a lesson. Add 3 DFW-LGA nonstops with mainline.
MAKE IT HAPPEN!!!
Puff on the cigar......cut to scene at AMR Headquarters."
Third email received:
Holly,
Regarding the catfight between NW and AA, I think you said it best a few years ago when you said, "AA may have written the airline gamebook, but nobody plays the game like NW." Or, words to that effect.
The e-mail you posted earlier today from the AA employee reflects the usual "Don't Mess with Texas" attitude that we all hear from AA from time to time. Its best he/she keeps in mind that NW's costs are MUCH lower than AA's. Best they be careful who they choose to two-step with!
Have a good weekend!
Northwest/American Pissing Match: A Reader Comments
"I may be biased (since I work for AA), but I think it’s clear who will come out on top in the AA-NW hub-infiltrating pissing match.
Let’s see….out of NYC, including LGA and JFK, Northwest (including Airlink) flies to….MSP, DTW, MEM, IND, GRR, and in September, DFW. I think that is it.
Out of LGA and JFK, AA (including Eagle) flies to LHR, CDG, ZRH, NRT, SJU, STT, SDQ, STI, CCS, EZE, SCL, AUA, YUL, YYZ, YHZ (those are outside of the 50 states, for starters, and I am missing some for sure ), and in the good old 50 states, BOS, BWI, DCA, RDU, CLT, ATL, JAX, MCO, TPA, FLL, MIA, PIT, CLE, CMH, CVG, DTW, ORD, MSP (as of September) SDF (beginning in September), BNA, MSY, DFW, STL, LAS (beginning in September), LAX, SFO, SAN, SEA…and I am missing some here as well.
Despite the fact the DFW metroplex is much bigger than the MSP area and it generates more local traffic to NYC, I don’t think there’s any doubt AA is going to smack NW around on this one.
NW needs to stop getting pissy about someone overlapping their routes. I know AA was well known for that too, but I think cooler heads have prevailed for awhile on that aspect here."
LOL
Sorry. I couldn't resist posting this for all to read. It's Friday. We need a little levity around here.
Dead Money
That's what Goldman Sachs analyst Robert Barry called the airline sector today in a research note.
He wrote that increasing supply of available airplane seats, continued fuel-price pressure and a tough pricing market together make "most [airline] stocks look like dead money."
Even with their recent pullback amid anxiety about weakening domestic results, Barry wrote that he doesn't see many positive catalysts for airline industry stocks.
He also downgraded Continental stock to "Neutral" from "Buy" on valuation and said he's enthusiastic only about shares of Delta Air Lines. In the longer term, he said JetBlue also is a "Buy."
Ticker: (NYSE: DAL); (Nasdaq:JBLU); (NYSE:CAL)
Let the Games Begin
Well, we figured that one out quickly enough. Moi was just reminded that this announcement follows the one a couple of weeks ago by American that it was going to start LaGuardia-Minneapolis service.
Oh boy.
Here we go. Let's get ready to rumble with two of the best.
Ticker: (NYSE:AMR)
Good Morning
I know, I know. I'm supposed to be writing. I am. But I couldn't resist this one piece of news that just came across the wires this A.M. I think it definitely qualifies for "strange news item of the day." Then again, the day is far from over, so who knows?
The news? Northwest Airlines just announced new service between Dallas Ft. Worth and LaGuardia.
Go figure that one out.
More later.
Ticker: (NYSE:NWA)
June 14, 2007
Crude Closes at Highest Level Since April
The price of a barrel of crude closed at $67.65 today. You guys know the drill. This is not good news for the things with wings.
Merrill Lynch Transportation Conference Wraps Up
Speaking of institutional investors, the Merrill Lynch Transportation Conference wrapped up yesterday in New York. Yes, that is why you have seen so many news stories containing various comments by airline CEOs and CFOs in the press the last two days.
The event began Tuesday and Doug Steenland, CEO of Northwest spoke that night at the dinner event.
Tuesday, I was asked by one of the hedge fund folks who I was meeting with what would be the one question I would ask of Steenland at that evening's dinner. (He was going.) I said that I would like him to explain just how the airline hopes to integrate its new internal regional operation with its external regional operators -- and what the grand scheme is for growth going forward -- as I am still a bit confused as to how the airline is going to use the various elements together that they now have in place.
Looking over comments that have been made by a number of other airline execs who were at the conference (and that included just about everyone) it appears that there have been no real surprises -- but Gary Kelly, CEO of Southwest did talk more about the fact the airline may have to slow down its growth -- and JetBlue's CEO Dave Barger said the airline is looking again at its current business model and it could make some additional changes going forward as well.
I'm still pouring over the webcasts -- but again -- I haven't heard anything that has been particularly earth-shaking yet.
And no, United CFO Jake Brace saying that United is still looking for a merger partner is far from news. I had to laugh when he prefaced his comments by saying that "contrary to some reports" the airline was still very interested in a potential merger. Like who is saying they are NOT interested? Pahleez. Oh and did you like the way he attempted to narrow down the potential prospects as he said this week at the conference in regard to a potential merger partner, "Our focus is on the Northeast, a southern-tier hub and helping us in Latin America."
Okay Delta. Get out that checkbook and start that merger deal cookin'.
In Jake and Glenn Tilton's dreams maybe.
See -- I Was Attending Tony's Funeral
Hi guys. Well, let's see. To give you an idea of what my Tuesday was like, let me put it this way. I spent a lot of the time while sitting in the airport, or sitting on the taxiway, or sitting in the plane (s), composing an op-ed piece for the NYT in my mind on how the airline infrastructure in this country has gone past the breaking point. It's quite broken already.
LGA, a little bit of weather, and well, it was one of those days. A very, very, long day. I walked in the door at about 3 a.m.
Then Wednesday we had some weather ourselves here at the Worldwide Headquarters, and yours truly ended up with no phone, no electricity, and no broadband. At least we didn't have a tree in the WWH or on the car -- a fate that many around us did have.
Finally -- today, we're back up and on the air.
But as I wade through the airline things of interest on my virtual desk, as I get in gear to start back to work on this week's issue of PlaneBusiness Banter, just a shot to prove that yes, I really was at funeral of Tony Soprano Tuesday. Well kinda.
My cab driver took the scenic route to LGA from Midtown, the one that wraps around through Queens and not through the tunnel or on the Brooklyn-Queens Expressway, and lo and behold, what did I see on my right as we crossed the 57th Street bridge but the Silvercup Studios. In case you don't know, this is where all the interior shots for the "Sopranos" were shot. Yes, the entire inside of the Soprano house, the Bada Bing, you name it.
Then there was my waiter at the Gerson-Lehman airline financial meeting I spoke at. The luncheon was at Smith and Wollensky and the waiter for our group looked and sounded just like Artie Bucco. (If you have to ask, forget reading further.) So given his likeness, and his propensity for dramatic gestures, I decided to ask him what he thought of the last episode. Well, it was like a tidal wave of expressionism burst forth across the room. And boy he knew his stuff too. He went back to things from season one. I meant to get his picture, but by the time my airline financial session was over with the institutional guys, he had quietly left the room -- and I only had his animated discussion to remember him by. I think I'm going to send the guys at S&W a note and find out his name so I can ask for him the next time I go there.
Reminder for PBB Subscribers: Friday Posting This Week
As I had told readers last week, we are publishing this week's issue on Friday.
Yes, I am obviously psychic. I knew I would not get home until the middle of the night Tuesday and I knew the Worldwide Headquarters would be headless (technologically speaking) for much of yesterday.
Uh-huh. Whatever.
Midwest Shareholders Elect AirTran Representatives to BOD
As most everyone had expected, AirTran has apparently been successful in getting three AirTran-friendly new members elected to the Midwest Airlines' board of directors.
"Midwest Air Group, Inc. (Amex: MEH), parent company of Midwest Airlines, today announced that based on a preliminary review of the proxies voted at today's annual meeting, it appears that shareholders have elected three directors nominated by AirTran Holdings, Inc. (NYSE: AAI) to Midwest's board of directors. The Midwest board consists of nine directors.
The company also announced that its board has determined it will permit AirTran Holdings to make a presentation to the Midwest Air Group board regarding AirTran's proposal. The board noted that it has made no determination to engage in negotiations with AirTran. No date for the session has been established.
Timothy E. Hoeksema, chairman and chief executive officer, stated that the election of directors constitutes a definitive action by shareholders. "While we are disappointed by today's results, we recognize that our shareholders have spoken. If today's election says anything at all, it says that our shareholders want us to listen and that is what we intend to do. The board remains fully committed to creating value for Midwest shareholders."
This news comes after AirTran extended its offer for Midwest until August 10 on Monday. The previous deadline was June 8. AirTran also said Monday that 59% of shares have now been tendered in favor of the offer.
Yep. This is kind of like Chinese water torture. I think we all know where this is headed, but Midwest is not going to go down without a fight. So it's far from over.
June 11, 2007
Attending Tony's Funeral
Well, not really. But I am in New York. Unfortunately it is a short trip. Very short trip. I'll be back home tomorrow night.
But (drum roll please), I did get to fly Delta today, and that included a nonstop on a Shuttle America Embraer 170 from MSY to LGA.
Comments? I like the way Delta is using a lot of pre-recorded professionally done audios for various functions -- both in the gate area and on the aircraft. Even though I was on a Delta Connection flight, the professional audio for the safety run-through sounded like the same voice to me.
One thing about the flight attendants on the flight. Very professional. Very accommodating. No giggles. Just a good job.
However, there were no markings of any kind on the Delta gates in N.O. - which meant folks kept going up and asking anyone they could find if they were at the right gate. The big LCD screens were still behind the gate stations -- but none of them were working.
The flight was maybe 2/3rds full, if that. Because of that I had two seats to myself. No complaints.
We did have turbulence most all flight -- we were really rockin' and rollin' there for a while -- but we all know that is out of the hands of any of us.
Interesting mix of birds at LGA, as there always is. I also finally got to see one of the somewhat iridescent Air Canada light blue/green liveries. Everyone who has seen it is right. It does look great in person -- but it just doesn't translate well in photos.
Also saw a couple of old dirty ratty looking Northwest red tails. And one Delta wavy tail that looked like it needed a new paint job .....like yesterday.
Funny thing happened after an otherwise great flight. They could not get the jet way to work right. Or at least they couldn't get it to get where it needed to be on the side of our aircraft. After about a 20 minute wait, we were finally told we were going to deplane by airstairs.
It was 1953 all over again.
Those getting on the plane had already been herded downstairs as well, and there must have been at least 10 or 12 security types milling around making sure one of the sheep did not get away from its respective flock.
Of course, the good thing about that whole little snafu is that our luggage was out and circling way before we even got down to baggage claim.
It was a beautiful day in New York. It's nice to be back. If only for a short trip.
June 10, 2007
OT/Sopranos Finale Take Two
Not surprisingly the HBO Sopranos' message boards are hoppin.' And I must say I think some folks over there have come up with what could be a valid interpretation of the end.
And I quote,
"Tony gets shot but instead of the viewer being a passive watcher we become Tony and feels what it's like to die instantly. All this motion is building up and when Meadow walks into the diner - at midstride - everything goes blank. That's what being shot is all about. Immediate darkness, quiet...nothing. I thought my cable went out but the blank screen only emphasized the suddessnes and stillness of death."
To which someone else added,
"Ok, so why does nobody see what happened? It was the saddest, greatest, ending of the greatest series ever.
The suspense was enormous, the emotion intense, nothing "lame" about it.
Will she park in time to get inside? Will she make it in time to die, or be the only remaining living family member. It's quite clear the guy who went to the bathroom, and the 2 hoods who came in before Meadow, where there for one reason. Tony whacked Phil, Tony got his. BUT, not only did Tony get his, so did everyone...even Meadow, as she did get there just in time.
Chase ended the best thing to ever hit tv with grace and mercy, yeah they all got killed, and there was no need to show us the gory details.
It's just...over."
Ah, ambiguity. Ain't it great?
OT/Sopranos Finale
Heh.
Shows how much I know. Tony wasn't shot -- but he might have been in another 2 minutes. And no -- while they were at a table, they weren't in the kitchen in the Soprano home.
I wonder if David Chase will include all three endings they filmed as part of the last season's DVD set?
June 8, 2007
Today's Problems in the Skies
It appears that it was not just weather that was making travel miserable for many today. We knew there was some kind of ATC issue on the East Coast, but was not sure what. Reports now say that the Atlanta NADIN (datalink) went down either late Thursday or early Friday morning -- and as a result the FAA then rerouted the system's functions to another system in Salt Lake City, which then overloaded due to the increased volume of data.
Nice.
And heck, the FAA hasn't even installed VISTA yet!
Foto Friday
A shout-out this week to PBB subscriber Charles Duncan, who sent us this shot that he took in Guam. Nice shot, eh? Very nice shot.
Another Bad Day in the Air; Nothing But Red
While they look orange in this JPEG, the dots here are red. All red. You can get updated info from the FAA anytime here.
Legend
Green: General Arrival/Departure delays are 15 minutes or less.
Yellow: Departures are experiencing taxi delays of 16 to 45 minutes and/or arrivals are experiencing airborne holding delays of 16 to 45 minutes.
Orange:Traffic destined to this airport is being delayed at its departure point. Check your departure airport to see if your flight may be affected.
Red: Departures are experiencing taxi delays greater than 45 minutes and/or arrivals are experiencing airborne holding delays greater than 45 minutes.
Black: This denotes a closed airport!
Set Your Tivos; Bill Moyers Takes on Airline Executive Compensation
This week Bill Moyers takes on the subject of airline executive compensation in his "Bill Moyers Journal." The program airs tonight on your local PBS channel.
To find out air times in your area, click here.
June 7, 2007
Feds Set to Announce Change in Passport Rules
We all knew this one was coming, didn't we?
Tonight it is being reported by various news organizations that a proposal is set to be announced Friday that will temporarily waive a requirement that U.S. passports be used for air travel to and from Canada and Mexico, provided the traveler can prove he or she has already applied for a passport.
According to the Associated Press, "The suspension in the rules is aimed at clearing a massive backlog of passport applications at the State Department that has slowed processing to a crawl, they said. Some officials said the change would last several months; others said as long as six months."
Instead of a passport, travelers will now be able to present a State Department receipt showing their passport application is being processed, and a government-issued ID such as a driver's license.
Rep. Heather Wilson, R-N.M, whose state is on the Mexican border, told the Associated Press that she had been calling on State and Homeland Security to implement a suspension for two weeks.
"I said, 'You need to take action. This is completely screwed up'," she said. "To say people must have a passport to travel and not give people a passport is right up there in the stupid column."
Amen.
Best Part About this NBA Final Game Tonight
No more Pussy Cat Doll promos from ABC.
Then again, the promos they are now using are pretty weird.
But they are still an improvement over those obnoxious PCD things. Give me TNT anyday.
PBB is Posted
For all you PlaneBusiness Banter subscribers out there, this week's issue is now posted.
And if you are not a subscriber -- shame on you.
You can now return to watching LeBron, Tim, Tony and, of course, Eva.
Go Cavs.
(It's an underdog thing.)
Trouble Up There in the Skies Today
I've had a couple of notes this morning and just saw another note on a list of airline geeks I hang out on -- doesn't look like it's going to be a good day to fly. Especially out of Denver or out of Chicago.
The reason? Unusually high winds.
Denver had diversions beginning last night, and today, they are waiting for the winds to turn to a more northerly direction. Currently RW8-26 at Denver is closed for repair, leaving only RW7-25 for arrivals (and possibly departures) according to a dispatcher we know.
Which brings us to Chicago. One subscriber just sent me an IM, telling me his flight has been pushed back more than an hour -- but the gate agent is somewhat vague on just when they are going to get out, and other flights are stacking up.
Apparently there is now a ground delay program in effect at ORD.
As all of this weather is moving west to east, expect to see ORD continue to grapple with this the rest of the day.
June 6, 2007
Can I Sue Delta Because My Stock is Worthless?
You know, there are some really dumb people out there.
Case in point. A question sent in to USA Today columnist Matt Krantz. And I quote,
"Q: My wife and I bought Delta Air Lines (DAL) stock many years ago when the company was doing well. Now I hear I've lost everything. Can I sue the company?"
While Matt basically told him he was SOL, but he could always consider becoming part of a class action lawsuit, (uh-huh) here is what I would have told this guy.