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Okay, enough jokes about American pilots flying DC-3s for food.
In all seriousness, that lovely bird that was parked at DFW today is the Flagship Detroit, and unlike its sister ship that is encased under glass at the C.R. Smith Museum, this bird still flies.
The Flagship Detroit Foundation is dedicated to keeping the aircraft flying. Want to learn more? Click here.
If so, I offer this "scary" Halloween pumpkin, courtesy of "Cockpit Conversation."
If you've never visited this blog, you need to. It is written by a female pilot who is based in Canada. As she says in her intro:
"This blog is about flying airplanes, learning to fly airplanes, advancing an aviation career in Canada, working as a commercial pilot, and commentary on aviation news. If you want the mixture of bad jokes, industry gossip, complaints, and not much of anything that comprises real cockpit conversations, log off the computer and go back to the crewroom.
It is not my intention to embarrass, slander or otherwise harm my employers, coworkers, customers or even my competitors. Therefore I will not identify companies or individuals, nor reveal corporate information, except in the context of public documents. There shall be no whining, no backstabbing, and no pictures of me, in or out of uniform.
I do reserve the right to make bad jokes."
Check out the Aviatrix. She's a good read.
We have it on the best authority that if the pilots at American Airlines don't roll over for a new concessionary contract, this is what they are going to be reduced to flying. Thanks to one of our American friends who tells us these shots were taken at DFW today.
Here we have the Beatles. Or at least the Beatles as portrayed by US Airways' General Counsel Janet Dhillon, aka George, Hal Heule, SVP technical services/maintenance, aka Paul, and Rick Oehme, VP of Maintenence, aka Ringo. That leaves that guy with his tie untied over there on the right -- CEO Doug Parker, aka John.
I think this one may take the prize for the day. I was going to save this for PlaneBusiness Banter, but hey, it's too good not to post here.
Gary Kelly, CEO of Southwest, aka Edna Turnblad, gets a thorough checking out by Dr. Kelleher. I mean, I don't know what is better -- Herb's leer, or Gary's expression of .....er.....whatever that expression is.
Is it just me, or does Herb look like he's done this before?
Okay, I take back what I said. Scott, er, Toni, looks much better here, dontcha think? Better shot of those great legs too. Wonder what those clueless passengers in the Phoenix Sky Harbor Airport thought about all this? That one guy looks like he's enjoying it.
It's clearly a year for major Halloween cross-dressing on the part of airline execs.
Can you guess who these two lovelies are? Yes, that's right. The Captain and Tennille. Kind of. Sort of.
All I have to say is that US Airways' President Scott Kirby makes one ugly woman. (The Captain? That's SVP of Corporate Culture, HR, Dog Catching and whatever else her title includes -- Elise Eberwein.)
I guess Love Will Keep Them Together. (Anyone for a little Muskrat Love?) Nice legs Scott.
Ticker: (LCC:NYSE)
Trick or treat! The dollar hits a new all-time low, oil hits a new all-time high, and Wall Street rallies on news of a rate cut.
I think Wall Street has a bipolar disorder. It's the only place I know where it's time to celebrate because the Federal Reserve has been forced to cut rates because the housing market has fallen off a cliff.
Meanwhile, as we cut rates, those overseas continue to shake their heads -- and bid up the price of oil -- which now costs them less than it did a month ago because the dollar continues to drop in value.
Got that? Okay. Forget it. It's time to go trick or treating.
Just a couple of comments about the decision that was handed down late yesterday by U.S. Bankruptcy Judge Robert Faris in the case of Hawaiian Airlines versus Mesa Air Group.
Last night -- on first blush, I thought Judge Faris had essentially split the difference in terms of what the airline had requested with his award of $80 million.
Not right. Not at all.
In reading through his decision more carefully today, it is clear that Judge Faris gave Hawaiian every single penny it asked for. According to Samuel Engel's testimony from SH&E during the trial, the airline was due $71 million in damages for the period up until August. Tack on additional costs for the months of September and most of October, and that is where the $80 million figure comes in.
In the trial, Hawaiian was asking for a total of $173 million, but the rest of that amount was based on "speculation" for future losses. In other words, it was an amount based on future go! operations.
So, in other words, Hawaiian Airlines is now free to sue Mesa again -- for additional damages -- for an additional period of time.
Today, Hawaiian said that it was now looking at its options in that regard.
Remember also that at the end of last quarter, Mesa had $250 million in cash in the bank. Based on that total, the judgment represents almost 1/3 of the airline's available cash. To put it another way, if American Airlines were to face a similar damages judgment, the total would be comparable to a $1.7 billion award.
Not chicken feed. No matter how you look at it.
So -- essentially Judge Faris not only delivered a ruling that was scathing of Mesa Air Group and its management, but he gave Hawaiian Airlines every penny it asked for.
But that was not the only "cost" to Mesa.
Remember that Aloha Airlines has its own anti-trust case coming up against Mesa next spring. In regards to that case, I think it would be fair to say that this trial succeeded in getting a great deal of information into the public record that the attorneys for Aloha can now use.
Just one additional tidbit. Aloha's case is an anti-trust case. That means that any damages that could be potentially awarded to Aloha would be "trebled" or tripled - in plain English.
As for the market reaction, shares of Mesa fell 9% today, closing at $4.65, while shares of Hawaiian skyrocketed -- both on the Mesa news and strong third quarter numbers. Shares here closed up 17% to $5.15.
Ticker: (Mesa:Nasdaq), (HA:AMEX)
Technorati Tags: airline CEOs, airline industry news, airline stocks, airlines, Hawaiian Airlines, Mesa Airlines
Uh-oh.
Traders were not happy when the government reported the latest oil inventory figures today. They don't like surprises, and after last week, the last thing they expected was to see the level of crude inventories drop ...again.
But they did, and the result has been a thrill ride in the trading pits.
Crude supplies fell by 3.9 million barrels to 312.7 million barrels in the week ending Oct. 26, the Energy Information Administration said Wednesday. Analysts had expected a build of 1.25 million barrels in crude stocks.
Refinery production was also sharply lower.
At last check, a barrel of light crude was now trading at about $94/barrel.
And here's even more bad news. If the Fed announces another rate cut -- look for the price of oil to surge even higher. That Fed announcement should come out here shortly.
LOL. I just went to add a permalink to the last post that would link the earlier photo of Gary to the post, and the post with Gary's photo is now positioned such that our Blue Dog is directly opposite. Looks like the Blue Dog just caught a glimpse of Gary.
Oh, just in case some of you don't recognize Gary Kelly's intended visage -- that's his take on Edna Turnblad, the mother of Tracy Turnblad -- both of whom are characters in "Hairspray."
The role was most recently reprised by John Travolta in the movie version of John Water's work.
Anyone else have any airline Halloween pics? What are you folks doing at Frontier this year? Will CEO Sean Menke keep the tradition of "dressing up for Halloween" alive for the management team? (I don't know if I'll ever get over Jeff Potter dressed as a hairy-armed Snow White.)
Doug Parker, Scott Kirby, Derek Kerr and Elise Eberwein at US Airways -- you guys doing anything crazy today?
Let us hear from you.
Technorati Tags: airline CEOs, Southwest Airlines, US Airways
We had a whole list of things we needed to do yesterday, you know, real life things. (Not online things.)
As a result, we are playing catch-up today on some goings-on.
One of those was an interview in yesterday's Dallas Morning News with the president of the Allied Pilots Association, Lloyd Hill, and reporter Terry Maxon. Maxon also posted more material from his interview in his blog.
Reading through the interview, and the additional material, this was the key exchange between Lloyd and Terry for me.
"MAXON: What about management wanting to start with your concessionary contract and negotiate downward from there?
HILL: Disappointing.
MAXON: How likely is it that the APA at the end of the day will agree with management and accept such a contract?
HILL: It ain’t going to happen. If they decide to go down that road, it’ll be one of a long line of miscalculations they’ve made so far."
By the way, in visiting the Dallas Morning News website this morning, I couldn't help but notice the list of "most emailed stories" in the bottom right corner of the home page. Here are the top three:
Dallas Mavericks' Dirk Nowitzki puts a premium on privacy
Embalmed heads found in I-30 truck
Tex-Mex Thanksgiving recipes
Yeah boy. Just what I like to see. Tex-Mex Thanksgiving recipes served with a side of embalmed heads.
Whew. No wonder Dirk wants to keep his private life private.
Then again, there was the list of the "most read" stories. Here are the top three in that category:
Woman kills herself after holding 2 hostage at Plano doctor's office
Dallas Mavericks' Dirk Nowitzki puts a premium on privacy
Man's body found beside Farmers Branch road
Wonder if the man's body had a missing head?
Technorati Tags: airline industry news, airline pilots, airline unions, airlines, Allied Pilots Association, American Airlines
BOO! Forget the supposed porn shots of Southwest Airlines' gal pal Kyla Ebbert that are making the rounds this week -- this has to be the scariest thing I've seen in a long time.
That's Southwest Airlines' CEO Gary Kelly in his, we hope, Halloween attire.
Ticker: (LUV:NYSE)
Technorati Tags: Southwest Airlines
For those who like to read the details, you can download a .pdf copy of the Judge Faris ruling here.
Ticker: (Mesa:Nasdaq), (HA:AMEX)
Technorati Tags: airline industry news, Hawaiian Airlines, Mesa Airlines
Mesa's Jonathan Ornstein had best get his checkbook out.
Breaking news from the Honolulu Star-Bulletin:
"Mesa Air Group, parent of interisland carrier go!, must pay Hawaiian Airlines $80 million for using confidential information obtained during Hawaiian's bankruptcy to enter the Hawaii market, a federal judge ruled today.
Bankruptcy Judge Robert Faris, who had taken the matter under advisement on Oct. 4 following a nine-day evidentiary hearing and trial, said Mesa breached a confidentiality agreement by failing to return to Hawaiian or destroy evaluation material on a timely basis, then using that material to gain a competitive advantage when entering the Hawaii market.
Faris also ruled that Mesa must pay Hawaiian interest of 3.97 percent per annum as of the date of today’s ruling, but denied Hawaian’s request for a one-year injunction against go! for selling tickets because he said the award of the money damages adequately redressed the harm suffered by Hawaiian."
More info here.
Our first take? About what we had expected. Judge Faris basically split the money request down the middle and let's go! continue to fly. I never thought he would shut the airline down. The only question was how much in damages he would award to Hawaiian. (Please see this post for an updated take.)
$80 million is no small hit for Mesa. Should be interesting to hear the Mesa response to the ruling. Nothing yet. Guess we'll hear from them tomorrow.
Ticker: (MESA:Nasdaq), (HA:AMEX)
Technorati Tags: Hawaiian Airlines, Mesa Airlines
What did we say about Northwest before they came out of their spa stay in bankruptcy?
I believe it went something like this: Look out, because when Northwest comes out of bankruptcy, they are going to be a force to be reckoned with.
Today, we saw just how much of a force the airline has become.
The airline rolled out third quarter numbers today and they were excellent. Makes you wonder how good they would have been had the airline been able to schedule all of its flights in July and August.
For the quarter, the airline posted a profit of $244 million, or $0.93 cents a share, compared with a year-earlier net loss of $1.18 billion, or $13.50 a share. The prior-year included $1.43 billion in reorganization costs.
Revenue dipped 0.9% to $3.38 billion, as Northwest cut seat capacity to trim less profitable routes.
The mean estimate of analysts surveyed by Thomson Financial was for earnings of $0.76 cents a share on revenue of $3.36 billion.
Read it and weep.
"Pushing prices higher today? Mexico's state-owned Petroleos Mexicanos, one of the largest crude suppliers to the U.S., halted production of 600,000 barrels a day due to inclement weather on Sunday. Petroleos Mexicanos, also known as Pemex, said it hopes to resume production in days.
Mexico is U.S.'s second largest crude supply country after Canada, shipping 1.66 million barrels a day in the first eight months, according to the Energy Department. Pemex is Mexico's largest company with annual revenue of nearly $100 billion. It's also the third largest producer of crude oil in the world, according to the company's website."
Citing "diminished confidence in the aircraft," Scandinavian airline SAS has issued a statement today stating that it has decided to immediately discontinue use of the Bombardier Dash 8 Q400 aircraft.
The announcement comes after yet another "incident" involving the aircraft and SAS.
Saturday an SAS Q400 crash landed at Copenhagen airport. There were no deaths or serious injuries reported in the accident.
On Sept. 9, an SAS Q400 caught fire after its landing gear failed upon arrival in Aalborg, Denmark. Five of the 69 passengers onboard were injured. On Sept. 12, a portion of yet another SAS Q400's landing gear collapsed after the plane landed in Vilnius, Lithuania.
The two crashes in September prompted a grounding of all Q400s worldwide. The grounding and subsequent aircraft inspections showed evidence of corrosion in the landing gear mechanisms of other aircraft.
"Confidence in the Q400 has diminished considerably and our customers are becoming increasingly doubtful about flying in this type of aircraft," said SAS CEO Mats Jansson in a statement.
The move came after Scandinavian aviation authorities on Saturday issued a new flight ban on all SAS's Q400 turboprops.
The airline said that it will seek compensation of $87 million from Bombardier. No matter what the cause of the incident was on Saturday, this is one very black eye for Bombardier.
This can't be good news for Horizon Airlines, the regional partner of Alaska Air Group either. The airline has 33 Q400s underfoot with an order in place for 15 additional aircraft. Frontier Airlines has also structured its new Lynx Aviation unit around the aircraft. Frontier has taken delivery of five of 10 total aircraft on order.
Bloomberg reports that Bill Conniff, spokesperson for Alaska AIr Group, said today that Horizon plans to keep flying its Q400 fleet.
Okay, all you PlaneBusiness Banter subscribers. Your almost 50-page earnings packed issue is now posted! Yep, this week's issue is a great one. ExpressJet's Jim Ream talks about his airline's experiment in 50-seat branded flying, United's Glenn Tilton gives us new examples of Tilton's Tortured Tidbits for the archives, Dave Barger explains how JetBlue is changing its game plan, Bryan Bedford tells us how difficult the pilot attrition problem has been for his airline, and Doug Parker gives us an [expletive deleted.]
That and more in this week's issue.
Not a subscriber? Not a problem. Just click here to get started.
All for now guys.
Hi guys. The beast for this week is finished, but I need some rested eyes to give this issue a final once over. Yep, another week, another long earnings-related issue of PlaneBusiness Banter coming down the chute. Woo Hoo!
Look for this week's issue to be posted tomorrow. I'll post a note here as soon as it is good to go.
Talk to you then!
This is getting to sound like a broken record.
How could I forget jet fuel? Yes, well, maybe it would be better if we all could just forget jet fuel.
New York harbor jet fuel closed at $2.56/gallon today. New record.
Another day, another record close for crude oil today. Oh, and for those of you who heat your home with heating oil, it too set a new all-time record today. Heating oil closed at $2.43 a gallon in New York.
Technorati Tags: airline industry news, airlines, crude oil
I'm going to post one more thing here today, and then you probably won't see too much more of me as I've got to wrap up another mega issue of PlaneBusiness Banter for this week. Yes, it's an earnings week. That means a late Friday posting. Just a nice side benefit of posting a publication electronically. Or, as the editor of Texas Monthly said in an email to both subscribers and website visitors only this week, "We’re no longer wedded to a traditional publishing schedule. The Internet — and the Internet user — is a beast that needs to be fed constantly, some days with multimedia extensions of stories in the current [hard copy] issue, other days with a peek at what’s coming next, and every day with blog posts."
Amen.
So speaking of feeding you guys constantly, how did the folks at Frontier do last quarter?
Well, let me put it this way. Between this quarter and the return of Sean Menke to the fold, I think we may just have to reconsider the airline's position on our Titanic Watch. Maybe. More on that next week in PBB.
The airline today reported consolidated net income of $17.3 million, or $0.39, for the company's second fiscal quarter, which ended Sept. 30. Excluding special items, the airline came in with a profit of $0.45.
This compares favorably to last year, when the airline posted net income of $0.5 million, or $0.01.
JP Morgan Airline Wizard Jamie Baker said this morning in a note, "Frontier’s 2Q (Sep) ex-item profit of $0.45 exceeded our $0.31 forecast and consensus $0.19, in one of this season's true upside surprises. However, a near-zero tax-rate contributed the upside relative to our Street-high forecast. Resulting 6.9% EBIT margin Frontier’s best in nearly four years, driven by 5.1% RASM and modest 3.4% rise in ex-fuel CASM. Company cites continued demand strength going forward (hardly unexpected), and a December quarter loss below last year’s ($0.41). No change to our ($0.24), which assumes a continuation of Frontier’s newfound RASM momentum."
So, there you have it. Lower taxes certainly helped, but all in all, still a good quarter for the folks with the animals on their tails.
Ticker: (Nasdaq:FRNT)
Technorati Tags: airline industry news, airlines, Frontier Airlines
Okay, so who else watched that football game last night? (Forget the World Series. Sorry but it's the friggin' end of October people.)
Obviously, as an LSU fan, you know who I was rooting for -- Virginia Tech. I mean, after all, how can the polls continue to have such a lightweight as Boston College in the number two position? Florida, Auburn, I could rattle off any number of teams that could beat BC.
So needless to say I was one happy camper as, with about 2 minutes to go, Virginia Tech seemed to have the game in the bag -- 10-zip -- as BC hadn't been able to score all game.
So who wins the game? Yep. BC.
I'm still not sure if the comeback was better than LSU's touchdown with one second left that gave them the win last week over Auburn. But, well, it was impressive. Matt Ryan, BC quarterback, showed some major moxie there in the last 2 minutes.
Drat.
This post reminds me. I need to start a new category for general musings, as try as I might, I can't figure out any way to throw in a reference to an airplane in this one.
Not a record most airline CFOs are going to like to see.
Technorati Tags: airlines, jet fuel, airline industry news
Official closing price for a barrel of NY light crude.
Technorati Tags: airline earnings, airlines, crude oil
As all good observers of the energy markets know, it does not necessarily follow that when crude prices rise, jet fuel prices do the same.
But today, sorry to say, this is the case.
We just hit a new all-time high for crude oil, as prices have surpassed the $90 a barrel mark. The price is bouncing around -- it has been as high as $90.60, then back down to $90.10.
Don't look now, but jet fuel is currently flirting with an all-time record high in trading today.
Yes, this is having a very negative effect on airline shares.
Last time I looked, New York harbor jet fuel had risen to $2.491 a gallon. If it stays at this level, or goes higher, we'll set a new record. The previous high for New York harbor jet was $2.487, which was set on Sept. 29, 2005.
Technorati Tags: airline stocks, oil prices, jet fuel prices
Cowabunga.
Yet another big day for airline earnings today. One thing is for sure. This quarter has been one of the heavily "front-loaded" variety, with a big onslaught of results all within the first 2 weeks.
Tomorrow Frontier will join the crowd, while Northwest will join the earnings parade next Monday.
For PlaneBusiness Banter subscribers, look for in-depth coverage of US Airways, Republic, United, ExpressJet, and JetBlue in this week's issue, which will be posted tomorrow. We'll tackle Alaska and Midwest with the group next week. But as always, subscribers can access our PlaneBusiness Earnings Summaries for all airlines on a current basis.
As for now -- let's take a quick look at the results from today. Then I am off to work on those in-depth earnings call reports for this week's issue of PBB.
First up is US Airways. The airline reported earnings of $177 million or 1.87. Excluding special items, the airline posted net income of $185 million or $1.96. Both of these compared favorably to last year, when the airline reported a net loss of $78 million or $0.88. Excluding items, the airline posted a profit of $101 million or $1.09.
The $1.96 profit results came in easily above the analyst consensus forecast figure of $1.77 profit for the quarter.
For Midwest, the news was not nearly as good, as the airline posted a loss for the quarter.
The airline posted a net loss for the third quarter of $3.9 million, or $0.15, compared with net income of $1.7 million, or $0.09 cents per share, for the same period the year before.
The most glaring tidbit that caught our eye here? The airline's operating expenses were up a whopping 24%.
For the nine months ending Sept. 30, the airline has only managed to post a profit of $9 million, or $0.35 cents per share, compared with net income of $1.8 million, or $0.09 cents per share, for the same period a year ago. Meanwhile, operating revenue increased almost 14% to $562.9 million from $496.2 million.
Finally, there is Alaska Air Group. The airline said today that it posted net profit of $82.8 million, or $2.11, up from $77.9 million, or $1.93 a share in the same period last year.
Earnings were adjusted to include mark-to-market fuel hedge accounting.
In last year's third-quarter, the company recorded a loss of $17.4 million, or $0.44 cents a share, as a result of charges related to the buyout of five MD-80 leases and a voluntary severance program in connection with a new labor contract.
Total operating revenue for the quarter rose to $995.1 million from $935.7 million last year and operating revenue per available seat mile (ASM) increased 1.5% while operating costs per ASM, excluding fuel and special items, decreased 1.1% from last year.
Third-quarter results topped the mean estimates of analysts polled by Thomson Financial for earnings of $1.92 a share and revenue of $988 million.
Nice quarter for the folks up in Seattle.
Tickers: (NYSE:ALK), (NYSE:LCC), (AMEX:MEH)
Technorati Tags: airline earnings, airlines, Alaska Airlines, Midwest Airlines, US Airways
I don't know about you, but this baseball game tonight is a total waste of time. I'd much rather be on an A380.
Specifically the one that is now enroute between Singapore and Sydney.
Yep. The inaugural Singapore "Flight of the Beast" is now in the air. Can't wait to hear the first reports from onboard the flight.
Not surprisingly, spoofs have been making the Internet rounds the last couple of days.
Here's a particularly good one from the Daily Mash I read today.
Safety Fears After A380 On-board Safari Incident
SAFETY concerns have been raised about the A380 super-jumbo after two passengers were attacked by lions during their on-board safari.
The two business class passengers had to be rescued when their Land Rover became bogged down near a watering hole and they tried to get back to their flat-bed seats on foot.
The incident comes as Airbus announced that the next generation of A380s will feature a 25,000 seat auditorium based on the Roman Colosseum.
Vasily Borodin, vice-president of Russia's Aeroflot, said first class passengers will be able choose up to a dozen people from economy and then command them to fight to the death.
"The winners and their families will be upgraded, so we should get some terrific contests," he added.
But the giant plane has been criticised by business travellers after it emerged that its on-board golf course was only nine holes, and not the 7000-yard championship links as originally promised.
Jean Floriette, A380 lead designer, said new planes coming off the production line would be upgraded to include a Jack Niklaus designed 18-hole course with club house and spa, although he admitted this could lead to compromises elsewhere.
He said: "We may end up having to cut back a bit on the grouse moor, but there's already a stag hunt and some world-class salmon fishing, so we hope this minor change will not inconvenience passengers too much."
He said there was no question of the A380 jettisoning Der Stuka, it's six storey high water slide which sends passengers down a 250 feet near vertical drop and on to a 300 foot long runway.
While I have not received a personal note from anyone regarding Sturgell's proposed appointment, there's no question where the air traffic controller's union sentiments lie on the Sturgell nomination.
In a press release today, the NATCA's president Patrick Forrey was quoted as saying,
"NATCA opposes the nomination of Bobby Sturgell for administrator of the Federal Aviation Administration. We oppose it because America's aviation system is experiencing record delays and an unprecedented degradation of safety margins, exacerbated by the largest decline in the number of experienced air traffic controllers since 1981. The mislabeled contract that the FAA imposed upon its controller workforce on Sept. 3, 2006 has resulted in more than 1,550 air traffic controllers leaving the FAA due to a poisonous and acrimonious labor situation in which morale has never been lower. Simply put, over the past five years of this administration, we have experienced the demise of the world's safest and most efficient air traffic system.
The President's nomination for FAA administrator has been an integral part of this systematic demise of controller staffing and abysmal labor-management relations. Therefore, NATCA will not support a nominee that will continue to exhibit a management philosophy that demoralizes its valuable workforce to the point of leaving."
Technorati Tags: air traffic controllers, airlines, Robert Sturgell
In case you missed it, the Bush Administration announced its pick to head the Federal Aviation Administration today.
That pick? The agency's current number two man, Robert Sturgell. Sturgell is a former United Airlines' pilot and has been serving as acting administrator following Marion Blakey's departure in September for the much-greener pastures of the lobbying life.
Prior to moving to the FAA in 2003, Sturgell held the position of senior policy advisor at the National Transportation Safety Board (NTSB), where he served as the Chairman's primary advisor and coordinator on the NTSB's recommendations, policy programs and other safety initiatives.
Prior to joining the NTSB, Sturgell was a flight operations supervisor and line pilot for United Airlines, flying the B-757 and B-767 in both domestic and international operations. Sturgell is also an attorney and has practiced aviation law at the Washington, D.C. law firm Shaw Pittman.
A former naval aviator, Sturgell was an instructor at the Navy Fighter Weapons School (Topgun) and flew the F-14, F-18, F-16 and A-4 aircraft. Now a Commander in the U.S. Naval Reserves (Retired), Sturgell is a graduate of the U.S. Naval Academy and the University of Virginia School of Law.
Now that we have the formal details out of the way -- has anyone sat across a conference table from Bobby? Is this a good move? Let me hear from you . I have never met Mr. Sturgell, but I have sent out a number of missives to folks I think may have worked with him in the past in an attempt to get more information on him -- particularly his recent FAA tenure.
Technorati Tags: airlines, FAA, Robert Sturgell
Talk about smart marketing.
USA Today reported reports that after fighting for years to replace the three-letter code used to identify Sioux Gateway Airport, city leaders are now making SUX the focal point of a new marketing campaign designed to draw more visitors to their little cornfield of dreams.
Sioux City officials petitioned the Federal Aviation Administration to change the code in 1988 and 2002. At one point, the FAA offered the city five alternatives — GWU, GYO, GYT, SGV and GAY — but airport trustees turned them down.
Kudos to airport board member Dave Bernstein, the man who apparently said, "Enough" and proposed embracing the identifier, instead of trying to run away from it. "I've got buddies that I went to college with in different cities that can't even remember their own birthdays, but they all know the Sioux City designator — SUX," he told the Associated Press.
Check it out. Buy a T-Shirt while you're there.
Here we go. Crank up the Stones. Time to start 'em up.
This afternoon the Allied Pilots Association sent its section six pay proposal to the airline.
For those of you with enquiring minds, you can access more information concerning the proposal by clicking here.
While I haven't had time to read through all of the finer points of the proposal yet, one part concerning Holiday Pay did catch my eye.
Apparently APA leadership considers Super Bowl Sunday to be a national holiday.
Why does this remind me of the old United Airlines' pilot contract -- the one that paid a pilot to have his piano tuned if the airline forced him to change domiciles?
Guys, sorry. Good try, but I ain't buying this one.
(A specific link to the holiday pay section can be found here.)
Technorati Tags: airline earnings, airline pilots, airline unions, airlines, Allied Pilots Association, American Airlines, AMR
JetBlue returned to the black for the third-quarter, posting net income of $23 million, or $0.12 per share.
This figure compares favorably with a year-ago loss of $500,000 The numbers were also a nickel above Wall Street's consensus forecast of $0.07, according to two different consensus forecasts.
However, as we have heard from other airlines, JetBlue is not too enthusiastic about its upcoming fourth quarter. In this case, the airline's ballooning costs could make a fourth quarter profit a no-show.
Frank Boroch at Bear Stearns said in a note this morning that "JBLU expects an operating margin between 3-5% (vs. our 6.8%), assuming jet fuel at $2.23/gallon all-in (vs. our $2.33), with a pre-tax margin of -1-+1% (vs. our +1.9%). Unit costs should increase by 11-13% y/y (vs. our 12.8%), while ex-fuel CASM should rise by 6-8% y/y (vs. our 4.5%) on a 10-12% increase (vs. our 9%) in capacity and a 4% increase in the stage length. The guidance (using our higher fuel price) implies 4Q EPS in the $0.00-($0.02) range (assuming a normal tax rate) vs. the current mean of $0.04 with a range of $0.12-($0.10). 4Q guidance implies a dramatic deceleration in 4Q y/y unit revenue growth on much more difficult y/y comps."
Technorati Tags: airline earnings, airlines, jetBlue
Another week and another lesson in bankruptcy economics.
United Airlines reported earnings today, and just as we saw with Delta Air Lines, a stay in bankruptcy court can do wonders for an airline's numbers.
Almost as good as a spa treatment.
Parent company UAL Corp. announced better than expected quarterly results today, as it announced third quarter earnings of $295 million, or $1.96 per share adjusted to exclude one-time items, on $5.5 billion in revenue. Consensus had the airline coming in at $1.88 a share.
No surprise that while about half of United’s revenue comes from North America, international flights are providing the fastest growth. Revenue from trans-Atlantic flights soared 17.4% from a year earlier, while Pacific passenger revenue climbed 14.8%.
Interesting that the airline posted such strong trans-Atlantic numbers -- especially after we saw American Airlines report weak trans-Atlantic numbers last week. They look even that much weaker now.
But, don't break out the party hats yet.
The airline said during its call that costs are rising faster than they had anticipated. As a result, it told analysts this morning that CASM is now expected to rise about 6% in the fourth quarter. YIKES.
The reason for the increase? The airline says it is because of higher maintenance expenditures and higher IT outsourcing costs.
(Reminds me of the latest conversation that PBB subscribers and I are having on the topic of airline IT.)
Not surprisingly, given the airline's double-digit increases in international revenue, the airline said today that it expects to cut the number of U.S. seats by about 3.5% in 2008. International seats will rise 6% next year.
Ticker: (UAUA:NYSE), (AMR:NYSE)
Technorati Tags: airline earnings, airlines, American Airlines, United Airlines
Hey guys. The current issue of PlaneBusiness Banter, all 40 some pages of it, is now posted. Subscribers can access this week's issue here.
However, my apologies to our subscribers, as we have been trying to send out our subscriber email notifications with no success since about 6 P.M.
The program we use to send our weekly publishing notices does not want to cooperate, for whatever reason. I'm going to give is one more try here -- before calling it a night.
Again, my apologies. Hopefully we can get these emails up and out of here as soon as possible.
Just popping in to update subscribers on this week's issue. Look for it this weekend. No posting tonight. I just finished our four big earnings reviews, and now it's on to page one to wrap up the week.
I just hope I can sleep without visions of RASM, CASM, and yield dancing in my head.
Behave yourselves tonight.
Talk to you later.
While I advised subscribers last week that I would be posting later than normal because of my travel schedule earlier in the week, just a reminder. We will be posting this week's issue of PlaneBusiness Banter either later today or this weekend.
Yep.
Obviously, because I have to get mentally prepared for the Tennessee/Alabama game Saturday, my preference is to get this issue out sooner than later.
But having four big airlines' earnings transcripts and numbers to dissect is not a job that can be rushed.
No, no, no.
Kind of like making fine wine. One has to take one's time doing the task.
Yep.
Something like that.
(I'm off to get the boots out of the closet. It's getting a little deep around here.)
In the meantime, enjoy your Friday. We'll be back later.
Or is it? I was just listening to Erin Burnett give her pre-opening rundown on the "Morning Joe" segment of MSNBC. (Erin is our favorite CNBC person these days.)
Erin was talking about an interview she did this week with Tiger Management's Julian Robertson on the anniversary of the 1987 stock market plunge (there is history that involves me, Julian, Jim Cramer, and US Airways stock, but that is a story for another day). In this interview, Robertson made the comment that we have not even begun to see the worst effects of the housing slowdown. He sees the potential for a major, lingering recession in the making. (Wonder if he also has a big currency position in euros?)
This was certainly a cheery way to open the day -- that and the comments from Caterpillar this morning. The heavy equipment manufacturer did not have good things to say about what it sees in the construction business -- either commercial or residential.
So while the company produced its best-ever third quarter profit per share -- as we have also seen with all the airlines that have reported so far this quarter, Caterpillar also sent the message that things are not looking 100% cheery on the horizon.
Speaking of that Wall Street meltdown anniversary, yes, today is the anniversary of the plunge in October 1987, Black Monday, when the stock market lost 23% of its value. It was the largest percentage drop in the stock market ever recorded.
At that time, 23% of the market was represented by 508 points. Today, we would need to see a drop of more than 3000 points in one day to equal the same percentage drop.
Nothing like coming home to four major airline earnings reports.
Makes one just want to go get back on the airplane.
Nah, not really. Just means we may have a Saturday morning PlaneBusiness Banter publishing date this week.
As of today, American Airlines, Southwest Airlines, Continental Airlines, and Delta Air Lines have all now reported in for the quarter.
Winners? Losers?
Well, here is a very over-simplified "first look" take. With oil prices surging, all airlines are now looking at current fourth quarter fuel estimates that look off-base. We haven't heard one that sounds overly enthusiastic about fourth quarter forecasts as a result. But, if we were to pick one of the four that sounded more upbeat, overall, than the others -- it would be Delta Air Lines.
This diminished forward outlook dovetails with our recent comments in PBB about airline stocks. Our thought was that earnings reports were not going to be overly positive about forward forecasts -- and it sounds like this has been the case with the four airlines that have reported so far. My take was that the sector probably had further to fall before it started to make its more normal cyclical upturn.
For Southwest, as Bear Stearns analyst Frank Boroch noted in his research note, the airline is now looking at a headwind of about $200 million in 2008 -- a result of the continued unwinding of the airline's infamous fuel hedges.
As Boroch estimates, this is the equivalent to a $4 one-way across the board fare hike (or 4% increase in fares).
For Continental, JP Morgan analysts Jamie Baker and Mark Streeter said this week that "Q4 guidance does not support current consensus. As one might expect, fuel guidance is roughly $70 million higher than in our model (~$60 million higher than earlier guidance), while ex-fuel costs have worsened by around $15 million and ‘other’ revenue is lighter than expected."
While the airline posted a good strong quarterly profit of $2.25 a share, the airline's forward guidance was, as Baker put it, "uninspiring."
On the American Airlines front, the JP Morgan boys made the comment in their note on the results, "Shares in AMR were greeted enthusiastically on Wednesday, a puzzling phenomenon in our view given a downbeat conference call focusing on deteriorating fundamentals and sluggish prospects for asset divestitures. We are diminishing our 2008 outlook, pushing valuation between that of CAL & UAUA, & sending AMR further back among our Overweight rated names."
Baker and Streeter added, "AMR management cited stubborn fuel, weak London trends to deteriorate further, Virgin in the Transcon, worsening pilot relations, and growing cost pressures. In fairness, booked load factor is ahead of last year, though that’s not the type of robust demand commentary we were hoping for. Finally, AMR admitted it was still deep in “study mode” as it has been for some time, exploring the possibility of divesting its Regional subsidiary, MRO, money management business, and/or frequent flyer program. Apparently that last point resonated with investors, who perhaps felt that AMR's divestiture studies had for some reason ceased. Unlike others, we saw little cause to celebrate."
On the Delta Air Lines front, the bigger news this week was not the airline's earnings. The bigger news was confirmation of the long-rumored joint venture deal with Air France.
But even putting aside the confirmation of that deal, (which we like) the airline appears to have posted the most upbeat forecast of the four.
Bill Greene, analyst with Morgan Stanley wrote this week, "New CEO Richard Anderson, is considering a number of interesting strategic options. Based upon his comments, we believe Delta is most likely to pursue a monetization of Comair assets first (within the next 90-120 days). Potential industry consolidation also ranks high on the list of options. Divesting non-core assets such as frequent flyer program, maintenance operations or AirElite (the company's business jet division) appears unlikely in 2008. However, the company could offer greater transparency into the financials of the hidden assets next year."
The airline said during the call that near-term revenue trends remain solid and that advanced bookings are up through November. While domestic capacity is set to grow minimally in the fourth quarter, international growth remains strong.
And, following up on what we said after Anderson was named CEO of the airline, we note that he told those on the airline's call this week that merging with another airline could be the best way for the airline to establish itself as "the undisputed leader in the airline industry."
The betting window is now open. Place your bets early. Place your bets often.
Just in time to note yet another earth-shattering all-time high record for the price of crude oil.
Yes, ladies and gents, the price of a barrel of light crude closed today at $89.47.
I go out of town and look what happens. Hey, less than $14 to go -- and won't that be a red letter day?
Check out the article in MarketWatch, including an audio update from the oil trader we listen to more than any other guy -- Phil Flynn at Alaron Trading.
I probably won't be blogging too much here this week. For those of you who are not PBB subscribers, I'm in New Jersey this week with my Dad, my brother, other relatives and friends of the family, as we gather to bury my Mom's remains.
I'll be back at the Worldwide Headquarters later this week.
By the way -- a big thumbs up to the folks at Continental Airlines. I had a great flight on Sunday. More on that this week in PBB.
Take care everyone -- I'll touch base later in the week.
Technorati Tags: oil prices
This week's issue of PlaneBusiness Banter is now posted. Subscribers can access the latest issue here.
We want to welcome another poor soul to the wacky world of airline-related blogdom.
That person is Bill Swelbar, currently a research engineer at MIT, but more widely known in airline circles as a person who has made his living over the years as a labor consultant. Over the last ten years, there were not too many major labor/management cat fights that Bill was not involved in -- representing one group or another.
We really like the name of his blog -- Swelblog. Easy to remember.
Check out Bill's latest airline labor-related ramblings here.
Unless a meteorite crashes into the Worldwide Headquarters tonight, this week's issue of PlaneBusiness Banter will be posted this evening.
More later. Behave in the meantime.
Okay, here's what we were waiting for. Here's Sir Richard, before the ill-fated jump off the side of the hotel in Las Vegas, still dressed in his priestly attire (remember he did marry two people on board the first flight into Las Vegas) and Southwest's gal pal, Kyla Ebbert.
I think the two are made for each other. I'm sure Kyla's mom was very proud.
Technorati Tags: airlines, kyla Ebbert, Richard Branson, virgin america
Looks like Sir Richard certainly didn't take positive advantage of some of his 15 seconds of fame on Wednesday.
Click here for the Daily Mail's take on the incident in which Sir Richard ripped his pants, after the wind banged him into the side of a building yesterday -- all while Sir Richard was supposed to be extolling the virtues of the Virgin America brand.
(No word on any Kyla sightings as of yet though, so not sure if the day was a complete disaster.)
Richard, maybe it's time you....grew up? I have to admit, the black briefs are a nice touch, though.
Technorati Tags: airlines, kyla Ebbert, Richard Branson, virgin america