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June 28, 2008
June 27, 2008
TSA TLAs
Every industry has it's own set of language quirks; three letter acronyms (TLAs, if you will) that become part of the language of that business. Traversing the Transportation Security Administration (TSA) web site it's hard to read an article without a decoder ring. They've got TLAs, FLAs, and at least one FILA on their site. 
I read a story on their web site that announced more random screening at gates this summer. They describe TSOs (Transportation Security Officers) being supervised by STSOs (Supervising Transportation Security Officers) working with BDOs (Behavior Detection Officers) and BAOs (Bomb Appraiser Officers) to detect IEDs (Improvised Explosive Devices), along with VIPRs (Visual Intermodal Prevention and Response teams), to enhance the ADASP (Aviation Direct Access Screening Program). That's right, I SYN.
While the airline industry bathes in red ink and airports are being asked to cut their costs or lose airline service, the Department of Homeland Security is looking for a 6.8% INCREASE in their FY2009 budget to $50.5 billion. Yes, that's billion with a B. You can check out the highlights here, but it includes an increase of $55 million for "deploying the Transportation Security Administration's Travel Document Checking program to airports nationwide". I looked for any reference to automation being developed for this purpose, but could find none. In TSA Administrator Kip Hawley's testimony to the Commerce Committee last May, he referred to "Travel Document Checkers", which sounds like those people who check your ID and boarding pass before you get to security. An extra $55 million for those folks (I guess we can call them TDCs)??
The TSA is pushing ahead with its CAPPS derivative called Secure Flight, and with an increase of $32 million (who knows how much they've already dumped down this hole), they feel like TSA will be able to take over passenger vetting by the end of 2009. I can't wait.
Earlier this month the Washington Times reported that an independent audit of the TSA produced by KPMG revealed, among other problems, that TSA was unable to provide documentation to back up $585 million listed in its financial documents due to weak accounting practices. Oh, heck, what's half a billion anyway? Besides, they are a security administration; they don't do accounting. But evidently they don't have all the bugs worked out in employee screening either. The same audit found TSA didn't consistently conduct background checks on new employees and contractors who provide IT security to the Coast Guard's financial center. DHS didn't argue with the report and said it is "taking aggressive action to implement the recommendations provided in the report," according to a letter written by David R. Nicholson, assistant administrator and chief financial officer at TSA.
Why on God's Green Earth (GGE) should we provide additional funding to an agency that has problems figuring out where the money goes? An agency that dumped who knows how many millions down a dry hole once called CAPPS II, now called Secure Flight (it needs one more word in the name for an official TLA), got its butt kicked by privacy groups, and now is trying this? They've been found lacking in screening employees who provide IT security and the KPMG report showed TSA has been allowing new employees "too much access to the computer systems immediately after employment". Let's spend $100 million on a passenger vetting system that requires a passenger provide name, address, and date of birth. What can possibly go wrong? GMAFB.
I am all for using airline reservations data to enhance security, but Secure Flight ain't it. It's virtually impossible to verify someone's identity with the information contained in a reservation without impinging on privacy, not to mention the gazillion dollars it will cost for the hardware and throughput required if the system is supposed to be even close to real time. Reservations can be an investigative tool. Time of booking, route, booking source, form of payment, telephone or email contacts, and of course name, are all present in a reservation and can assist intelligence folks tracking bad guys.
The real issue here however is that TSA doesn't seem be reading the news. The cost of travel is going up, there will be significantly fewer seats offered for sale from significantly fewer airports. And it doesn't appear to be a short term blip. What airlines and their passengers do not need is additional upward pressure on fees associated with air travel. Even in the name of "security". 
AMEX Airline Index Hits New All-Time Low
The AMEX Airline Index closed at 16.20 points Friday. But earlier in the day the index sank to 15.83 points, a new all-time low.
Technorati Tags: airline stocks, airlines, AMEX Airline Index
$130 Do I hear $130. $140, do I hear $140, $142, Do I hear $142? Uh-Oh
Another Friday. Another record breaking oil price notched in the record books.
While at one point today, oil traded as high as $142.60/barrel -- when all the excitement was over, oil closed at "only" $140.21.
I guess this is what they mean when they say, "Be thankful for small favors."
Another rotten day for most of the airline sector on Wall Street as well. For those few airline stocks that posted gains on the day, the gains were quite small.
Mesa Air Group Finally Schedules Conference Call
What do they say -- better late than never?
Mesa Air Group has finally scheduled its fiscal second quarter (quarter ending 3/31) earnings call for Monday. Time is now scheduled for 2.P.M. EDT.
The Dog Ate My Keyboard
Not really. Just my keycap.
This is the result of one overly excited dog who decided to jump on top of the bed, even though I informed her quite clearly that no, not with the laptop on my lap.
Unfortunately, her big paw, or rather, one particular nail on that one big paw caught the "A" key and ripppp.
The Crime:
The Guilty:
Never fear. I went online, found an appropriate YouTube instruction video, and presto, back in business. Yes, I do wear out my laptop keys pretty quickly as you can see. My E, R, I, L, N, D, F, E, S, A, M, B, and C keys need replacing.
Something for my next trip to civilization and its accompanying Apple Store.
No, there is no Apple Store in New Orleans. As I said, something for me to do on my next trip to civilization.
June 26, 2008
$120, do I hear $120. $130, do I hear $130? $140? Do I hear...Uh-Oh
Another day, another horrible milestone in terms of oil prices as the price of a barrel of crude shot up today more than $5 a barrel. In intraday trading the price hit $140.39, but when the markets closed here in the U.S., oil futures closed at $139.64, up a whopping $5.09 for the day.
The news comes as we hear of 8% cuts in management employees at American Airlines, in addition to flight cuts at both American Airlines and United Airlines.
And not too long after these cuts were announced, Southwest Airlines came out and said it had modified their fall schedule -- picking up a lot of the pieces that were just discarded by the legacy airline pair.
American said Wednesday that it plans to eliminate 62 flights at Chicago O'Hare: 28 departures on mainline American Airlines flights and 34 flights on American Eagle.
By November, American's presence at Chicago O'Hare will be down 13%, year over year.
The airline is also pulling back flights out of St. Louis, Dallas-Ft.Worth, and New York's LaGuardia.
American is ending service completely to Albany, N.Y.; Providence, R.I.; Harrisburg, Pa.; San Luis Obispo, Calif.; Samana, Dominican Republic; and Barranquilla, Colombia.
Meanwhile, United announced that it was ending service to Fort Lauderdale and West Palm Beach.
Today, Southwest Airlines followed-up on these announcements by announcing that it will eliminate 31 flights from its existing schedule and add 40 flights to growth markets. This will see the airline not retiring two aircraft that it had said previously it was going to retire.
Big winners in the new schedule? Denver and ....Ft. Lauderdale.
It's Thursday....Am I Home Yet?
One of the more unusual things I get to do when I go out of town to talk about the airline industry and its financial problems is that I also get to go to these events as a ....passenger.
So yes, there is a lot of "hat switching" that goes on. First I am talking airlines from an economic perspective. Then from an investment perspective. Then from a passenger perspective. Then -- I fly a plane to get there to talk about all this.
And, if I am lucky, I get to fly one back too.
It's almost like shooting a movie, only from the perspective of at least three different cameras.
Wednesday morning I had a great time speaking at the Midwest Business Travel Association, which officially, as homage to my presence, changed their name yesterday to the Chicago Business Travel Association. (No, I really had nothing to do with it, but I agree wholeheartedly with the change.)
I flew to Chicago on American Airlines. I returned on American Airlines.
Both flights were noteworthy, but for very different reasons.
Know that old less-than-flattering American descriptor -- SkyNazis?
Yes, well, I hate to say this, but my flight attendants on my flight to Chicago were solidly in that camp. "Surly" would have been a good alternative adjective. Three men, and not one smile, not even one hint of a smile as I watched the two in the back of the bus work the crowd. I was in an aisle seat so I had a good view. And nope -- never. Nothing close. In fact, they also managed to leave off the last sentence of the what now seems to be the set statement regarding the new buy on board food choices. That's right. I was deliberately paying attention because, you know me, always adventuresome, I wanted to try something.
But after they announced the beverage service, they forgot a line that I DID catch on the flight home. The one about letting your flight attendant know during the drink service if you were interested.
After they made their humorless (or humanless) trip up the aisle with the beverage cart, I assumed they would make a second pass asking about food. Nada.
At that point I figured it was probably not worth the trouble. I would add that no one around me was enticed to order anything either. They were probably afraid to ask.
But yes, in reflecting back on the flight later -- there is no question that the attitude of the inflight crew on this flight was probably one of the worst I have experienced in a very long time.
So yesterday, I arrive at O'Hare in plenty of time for my 1:40 scheduled departure for New Orleans. Aside from one TSA agent who probably should have stayed in bed yesterday, my trek to the gate at K17 (yes, at the very end of the concourse) was uneventful.
The American Airlines person handing me my bag tag was reasonably friendly. Good.
Flight coming into ORD was delayed. No problem.
Flight finally arrives. Good.
Flight now had maintenance folks on it. I don't like where this is heading.
We get an update from the gate agent. She is not sure now when we are going to depart.
And then it got kind of interesting.
Because at one point our gate agent, who I have observed going down the jetway and coming back more than once, gets on the intercom and informs us that maintenance will not tell her what the problem is, nor will they give her any indication of what is going to happen to the airplane, no timetable, etc.
She then says she is going to call some other sources and she would be back in touch with us.
Hmmmmmm.
Now, for those of you who have not heard, there is a little problem going on right now between American and the TWU.
The other night one of our American friends forwarded me a copy of a letter from the JFK local that represents the American mechanics. It seems the airline just fired a few mechanics there for "sleeping on the job."
To sum up the rest of the letter, the union was advising members that if the airline was going to start enforcing certain rules and regs by the book, then they should too.
Yes, we in the industry know what this is -- it's called "code."
So I don't know exactly what was going on with my flight yesterday. Maybe the mechanic working on it was just not sure how much more time it was going to take to fix the problem. Maybe the gate agent was being pushy. Maybe she was being pushy because the mechanic was being too vague. Maybe she was pissed off because he was being a jerk. Maybe she was assuming that he was being a jerk.
Whatever -- I thought it unusual that our gate agent would come out of the jetway, obviously not happy, and then proceed to tell us that she was going to try and get us some more information from other sources (tower, dispatch) as to what was going to happen to us. Which she then did.
I got home. Finally. About 4 hours late.
The good part? The flight attendants on my flight home were very friendly and made a big point of pushing the buy on board option. They did their job, and they did it well.
Then again, as my seat mate noted, "You know it would have been nice if at some point onboard the Captain or someone would have just said, "We apologize for the delay coming out of Chicago" instead of reading the usual script about thanking us for flying American Airlines."
Sometimes the obvious things are those that are the simplest.
Speaking of, to my American Airlines' gate agent, Darnell Law, a huge thank you. I was not the only passenger who personally thanked her for doing such a great job at keeping us informed as to what the delay was, how long it would be before we got an update, and why it was that we were not getting any updates.
June 24, 2008
An Early Look at Airline Stocks, Oil Prices, and Wall Street Enough to Send One Under the Covers
Home prices post record 15.3% drop
Stocks tank along with confidence
Consumer confidence tumbles to 16-year low
Crude rises in volatile trading
Okay.....just went to check on where oil was trading, and those were the financial headlines that hit me in the face. Kind of makes you want to get back in bed and pull up the covers.
Don't think it's going to be a good day for the airline stocks -- as oil futures were up before trading began and prices are up, as of this posting. Currently oil is up a little more than 50 cents, trading at 137.25.
Parting the red sea of losses that are stacking up already in the airline sector, ExpressJet is leading the pack. The airline's shares continue to get just hammered. Shares here are now down 13% already, trading at 88 cents. And how much was that offer that SkyWest had on the table earlier this spring for ExpressJet? Yeah. It was for a lot more than 88 cents.
By the way, lost in all the hubbub of rising oil prices, I know it is June, and we are looking at record heat across much of the country -- but just a little peek at what will begin to affect some of you just a scant three months from now.
Know where a gallon of heating oil is trading today? 3.83/gallon.
Hello Windy City: Wings On the Road
Last speaking gig for a while tomorrow, as yours truly travels to Chicago today. I'll be speaking at the continuing education conference for the Midwest Business Travel Association bright and early tomorrow.
And what chariots of the air do I get to fly on today?
The much-maligned Maddogs of American Airlines.
Yep. I'm on the silver birds today. But luckily my reservation was made before the baggage charge cut-off. Yippee. So I can still fly with one bag checked at no charge.
I look forward to meeting some of our PlaneBusiness Banter subscribers while there.
However, with this new metal in my mouth, I don't think a deep dish Chicago pie is on the agenda.
Maybe some Eli's Cheesecake though.
Technorati Tags: airlines
June 23, 2008
First Tangible Furlough Numbers Released by United Airlines
United Airlines finally gave more specifics today concerning how many pilots should expect to be furloughed as part of the airline's plan to shrink.
The airline said today that it plans to lay off as many as 950 pilots. This will represent about 15% of the airline's 6518 pilots.
Ticker: (Nasdaq:UAUA)
Technorati Tags: airline pilots, airlines, United Airlines
Holy Smokes.....Bad Day For Airline Stocks on Wall Street
After a week in which airline stocks managed to hold their own -- shares of many airlines were beaten into the ground today, as oil picked up 1.04, closing at 136.40.
Look at some of these one-day double digit drops: Continental ended the day down 16%, closing at 11.96; Delta ended down 12%, closing at 5 bucks even; US Airways lost 19%, closing at 2.54; Northwest lost 17%, closing at 5.51; Mesa was down 14%, ending the day at 48 cents; and United Airlines lost 15%, closing at 6.09.
Horrible day on Wall Street for the things with wings.
R.I.P. George Carlin
"In the unlikely event......."
This is a very suspect phrase, especially coming, as it does, from an industry that is willing to lie about arrival and departure times.
"In the unlikely event of a sudden change in cabin pressure..."
ROOF FLIES OFF!
"..An oxygen mask will drop down in front of you. Place the mask over your face and breathe normally."
Well, I have no problem with that. I always breathe normally when I'm in a 600 mile-an-hour uncontrolled vertical dive. I also SHIT normally! RIGHT IN MY PANTS!
-George Carlin "Jammin in New York" 1992
June 22, 2008
PlaneBusiness Banter Now Posted
Subscribers can now access this week's issue of PlaneBusiness Banter here.
June 20, 2008
Mesa Gets Official Delisting Letter From Nasdaq
Mesa Air Group filed an 8K with the SEC today, in which it said:
"On June 20, 2008, Mesa Air Group, Inc. (the “Company”) issued a press release announcing that it received a Nasdaq Staff Determination letter (the “Notice”) on June 18, 2008, indicating that the Company fails to comply with the minimum bid price requirement for continued listing set forth in Marketplace Rule 4450(a)(5) (the “Rule”). Therefore, in accordance with Marketplace Rule 4450(e)(2), the Company has been provided 180 calendar days, or until December 15, 2008, to regain compliance. If, at anytime before December 15, 2008, the bid price of the Company’s common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days, the Company will have regained compliance with the Rule.
The Notice also states that if the Company does not regain compliance with the Rule by December 15, 2008, Nasdaq Staff will provide the Company written notification that its securities will be delisted. In the event of such a notification, the Company intends to request a hearing before a Nasdaq Listing Qualifications Panel to review the Staff Determination. There can be no assurance the Panel will grant the Company’s request for continued listing.
The Notice arises as a result of the fact that for the last 30 consecutive business days, the bid price of the Company’s common stock has closed below the minimum $1.00 per share requirement for continued inclusion under the Rule."
Technorati Tags: airlines, Mesa Air Group, Nasdaq delisting
Why Not? It's Friday....Michael O'Leary Says Ryanair to Offer "Beds and Blow Jobs"
Just another Michael O'Leary story for a Friday afternoon.
O'Leary, the always chatty and usually controversial Chairman and CEO of Ryanair recently gave an interview in Germany where he talked about how Ryanair might set up a new trans-Atlantic operation. He said that the new service would definitely be two-class, as there would always be a market for those higher-priced seats.
So in "Economy [class] it will be very low fares, but in business class it will be beds and blow jobs," O'Leary calmly explained.
His German translator, clearly somewhat unnerved, then explains that she can not come up with a proper German equivalent of "blow job." Whereupon O'Leary makes a crack about how the Germans must have a terrible sex life.
Hey, as I said, it's Friday. I think we all need a cold beer. Or two. Don't you?
Technorati Tags: airlines, Michael O'Leary, Ryanair
Midwest Airlines To Ground MD-80 Fleet
Yet another heavy shoe hit the floor today as Midwest Airlines announced that it is grounding its entire MD-80 fleet.
The Business Journal of Milwaukee reports:
"Midwest Airlines will be grounding its entire fleet of MD-80 aircraft -- used largely for long-haul flights to the West Coast -- and lay off an undetermined number of employees as part of its planned restructuring efforts, airline spokesman Michael Brophy said Friday.
The Oak Creek airline will stop flying about a dozen of the less-efficient MD-80 planes in its effort to counter the skyrocketing cost of fuel. Brophy said the number of affected employees, which would include pilots, have yet to be determined.
The aircraft are used largely for long flights to West Coast destinations like Los Angeles, Seattle and San Francisco. Brophy said the airline has not yet determined whether it would eliminate some of those destinations or reduce the frequency of some of those flights. Midwest has the option of serving those cities with the other airplanes in its fleet, Boeing 717s, from its Kansas City hub."
Between Maddog groundings at American Airlines and Midwest, Allegiant is going to have a bevy of MD-80 beauties from which to pick their next aircraft.
June 19, 2008
More Details on Continental-UA Deal Per Tilton
United Airlines' Chairman and CEO Glenn Tilton went into more detail in his email to employees today.
In addition to the basics we mentioned earlier, Tilton also said:
"In addition to the network and customer benefits, we'll work with Continental to find sources of cost savings and operational efficiencies that can be gained through cooperation in areas such as common technology, procurement, the use of facilities, including lounges. Within the limits of our agreements, we will explore opportunities to reduce spending by pursuing common contracts with suppliers and combining our considerable purchasing power. We will leverage shared information technology capabilities to develop world-class systems more cost effectively, and investigate the possibilities to standardize and optimize our real estate and lounge systems across the world. There is tremendous potential for both cost and operational efficiencies and new revenue, and we plan to explore every opportunity."
That is an interesting paragraph. "Shared information technology capabilities..."
Well we all know that EDS just signed a huge contract with Continental not too long ago. So we would have to believe that perhaps this means United will join in this same effort to build a new res system in tandem with Continental?
Going through a couple of notes from you, one person suggested that this really does look like a "trial marriage" and that we should see a full-blown merger between the two airlines within 12-24 months. Sounds about right.
Another reader suggested that US Airways is not necessarily the biggest loser in this deal -- but that American Airlines is, as American and British Airways were both courting Continental in an effort to give the oneworld alliance a nice kick in the pants.
What do you think?
Amusing Observation from CAL-UAUA Press Release
From the official PR Newswire release:
"Continental Airlines and United Airlines Announce Comprehensive Plan for Global Cooperation; Continental Plans to Join Star Alliance Thursday June 19, 2:10 pm ET"
"Global Cooperation?" Oh for goodness sakes. Why didn't they just say what they really meant...."Global Domination!"
Continental Airlines To Join Star Alliance; "Partnership" with United Airlines Also Announced
Continental and United Airlines made it official today. Continental is going to join the Star Alliance.
Funny, but the week after the United/US Airways merger died, I told readers of PBB that I believed we'd hear shortly that Continental was going to join Star. I had quite a few subscribers write me and debate the issue pretty heavily.
But more important than the Star link-up, Continental and United also announced the long-rumored new "partnership" between the two airlines. The deal is a bit different, depending on whether you are looking overseas, or at the two airlines domestically.
Internationally, Continental says that it is going to seek antitrust immunity from the DOT to form joint ventures on trans-Atlantic flying with United and Lufthansa, and eventually on flights to Latin America and Asia.
But domestically, the "partnership" will be limited to codesharing between the two airlines.
Where does this leave US Airways, which is still a member of Star?
According to a message that the airline sent out to employees, it doesn't change anything.
"Q. Does this change our codeshare relationship with UA?
A. No. As part of the process to invite CO into Star Alliance, we reaffirmed our relationship with UA and our position in Star Alliance. The US-UA codeshare program will remain one of the largest codeshare programs in the industry.
Q. Isn't Star Alliance already the largest global airline alliance? Why do we need another North American member?
A. Each member of the alliance brings unique value. The CO route network brings new destinations and additional service in important markets that have limited service by current Star Alliance member carriers. CO customers will gain access to additional services not available to them today, including airport lounge and frequent flyer benefits.
Q. Will US reduce flying as a result of United's new relationship with CO?
A. No, today's announcement will have no impact on the level of US operations. Codeshare programs, frequent flyer cooperation and other aspects of an airline alliance help to increase the number of passengers US Airways carries.
Of course the next question would be -- does this mean that Continental Airlines and US Airways could enter into a potential codesharing agreement?
According to the US Airways internal missive, "We haven't had discussions yet on a possible codeshare or potential bilateral relationship with Continental."
Ticker: (Nasdaq:UAUA);(NYSE:CAL); (NYSE:LCC)
Technorati Tags: airlines, Continental Airlines, United Airlines, US Airways
June 18, 2008
Federal Express Absolutely Positively Scares the Market
Forget airlines. We all know what the problems are with this industry and with its stocks.
But for years haven't we also heard how the airfreight/cargo boys would always be able to prop up their profits by simply adding fuel surcharges to the mix -- something their passenger-flying cousins were not able to do as easily?
Well, something funny has happened to that old "rule of thumb" thinking.
It doesn't appear to be working anymore.
When FedEx last announced earnings, the company was not particularly bullish on the quarter coming up.
Today, the company took it a step further -- and as expected, Wall Street was not happy.
Alan B. Graf, Jr., FedEx's executive vice president and chief financial officer said in a statement that the next year is expected to be "very difficult due to the weak U.S. economy and extremely high fuel prices." (The FedEx fiscal year ends May 31, 09.)
If one is an economic observer like me, this news says a couple of things. One -- obviously FedEx, even with fuel surcharges, is now seeing a "significant" slowdown in their trending. So much for the recession-proof surcharge idea. Secondly, if FedEx is saying this, and we already know the trucking industry as a whole is getting killed with high fuel prices, there is going to have to be a tipping point here in terms of additional transportation costs being absorbed into higher prices for all manner of goods. But if the economy is as sluggish and consumers are as tapped out as they seem -- there does not seem to be a lot of room for any higher prices.
As of this posting, shares of FedEx are down about 2.5% on the day, as shares are trading around 82.27. Shares of UPS are down about 2%, trading around 66.01.
June 17, 2008
Wounded Warriors
Hello there, Godzilla here. It's been a while since I've posted on PlaneBuzz, and not for a lack of subjects available considering the current state of the airline industry. To be honest, sometimes writing about the gloom and doom out there is physically draining. I think Holly would agree with that.
So here is a little diversion; a little side trip away from tracking the daily increase in the price of a gallon of gas, or the calculation of reduced ASM's from the latest announcement of air service cutbacks. As some of you may know, I am a pilot and a Certified Flight Instructor (FAA code named CFI/A/I/ME) and I own an airplane. Late last year I learned about a group called Veteran's Airlift Command, a group of over 700 volunteer pilots who fly wounded soldiers and their familes to and from treatment facilities, at no charge. Soldiers receiving treatment for their injuries receive first rate care, but that care is often at a facility far from their family. Having family members close by during recovery is an important, some would say the most important, factor in a speedy recovery. The mission of the Veteran's Airlift Command is to "......provide free air transportation to wounded warriors, veterans and their families for medical and other compassionate purposes through a national network of volunteer aircraft owners and pilots."
I flew to San Diego this week and visited the Naval Medical Center San Diego (NMCSD), also known as Balboa Naval Hospital. While visiting several facilities co-located on the hospital grounds I had an opportunity to talk with the most impressive group of people I've ever had the pleasure of meeting. Located in the same area as NMCSD is Fisher House Balboa, an amazing facility that houses families of recovering military personnel free of charge.
Down the street from Fisher House I met with both the Army and Marine staff in charge of their respective programs. The Army program is called the Warrior Transition Company, and the Marines call it the Wounded Warrior Battalion.
The purpose of my visit was to make the staff aware of the service available, and as I said, they were an amazing group of folks.
But that wasn't the really impressive part. The really impressive part, or maybe the most humbling part of the trip was talking to the Soldiers and Marines.
Like Army Specialist Joe who had come in for a haircut. He's only been married for two months and is a bit new at the Husband occupation. Joe selected a couch for their new place without soliciting the approval of his new wife, with the expected result (take it back). I told him I thought red was a great color for a couch (!), and although I am not the person to give advice about either marriage or haircuts, I was pretty sure that anything going into a living room needs wife approval. Joe is a bilateral amputee and because of the severity of his injuries, using prosthetic legs is very painful and he can't use them for long periods of time. But as he walked off the elevator and extended his hand to me you couldn't tell he was feeling any pain at all from the legs. What a tough kid.
As I was waiting in the reception area for the Wounded Warriors Battalion I had the opportunity to observe the interaction between Marines who seem to continually come, go, and wait. These were young people who had some terrible injuries, but they were still wising off and busting chops.
I watched as two Marines walked by each other in the hallway, one raising his hand over his head and saying "Give me four" to the other, who was missing a finger on his right hand. Another Marine walked by his friend who was wearing a new prosthetic leg and said "Dude, that's a F#$%@d up lookin' leg!"
One Marine came in to the waiting area wearing shorts and a T-shirt that said "Please tell your boobs to stop staring at my eyes", which made me laugh out loud. As he hoisted himself from the wheelchair to the couch (he was also a bilateral amputee) with ease I also noticed he was missing a finger on his right hand and his right eye was glass. He struck up a conversation with another Marine waiting there, who was missing his right leg below the knee, his left leg was in a brace, and his right arm was in a type of cast from wrist to shoulder. They talked about stuff guys their age talk about, and I after a while I felt at ease enough to add my opinion on the subject (which was about the ridiculous salaries of Major League Baseball Players).
My point in describing the injuries is not to overshadow who these young people are; on the contrary. Although they have permanent injuries they still have lives to live. They still want to do the things that young people do as they grow up (although I did point out that the Boobs T-shirt was probably not the best way for him to accomplish his current goal). They are alive and they will live (hopefully) long fruitful lives. But as a society we owe these people something. A lot, actually.
It is not my purpose to have a political discussion on the war against terrorism. For the young people I met in San Diego it was a simple matter of doing their duty as they were asked. Now it is our duty to make sure these lives are not wasted. There are a lot of groups who need help providing assistance to wounded warriors and you can certainly donate to the Veteran's Airlift Command and click on "Ground Support....Make a Donation". Also, Fisher House is building another facility at the Balboa Naval Hospital and you can contribute to that endeavor through this link.
We now return to our regularly scheduled airline blogging.
Thanks for reading.
June 14, 2008
PlaneBusiness Banter Now Posted
This week's issue of PlaneBusiness Banter is now posted. Subscribers can access the latest issue here.
June 13, 2008
Most Shocking News of the Week: Frontier Airlines Keeps All The Planes
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Clearly the most shocking news in the industry this week was the fact that Frontier Airlines did not take the opportunity to get rid of its Airbus A318s as part of its bankruptcy reorganization.
The airline this week reaffirmed the leases on all of its aircraft. All of them. That's right. Every single one of them.
As most of you know, when an airline files for Chapter 11 protection, the airline is allowed to suspend the payment of any aircraft leases or contracts for a period of 60 days.
At that point, the airline has to make a decision on which aircraft it wants to keep, and which aircraft it wants to get rid of.
Surprising to me, and a lot of other industry observers, Frontier did not take this opportunity to get rid of any aircraft. I would have bet money that they were going to take this opportunity to ditch the A318s.
The airline owns 22 of its Airbus aircraft and leases 38. The airline also flies 10 Bombardier Q-400s under its Lynx brand. The airline owns five of those aircraft and five are leased.
Jet Fuel Closes A Bit Lower: Not Enough To Get Excited About
Another bizarro day on Wall Street today for airline stocks. The price of oil declines a measly 1.88 to $134.86/barrel and the market bids up airline stocks as though we really had some kind of great news.
Meanwhile, for the week, jet fuel closed at $3.94/gallon. (New York)
Yee haw. Time to run out and celebrate.
Well, maybe not.
Delta Ups Number of Employees To Be Let Go Under Voluntary Program
Delta Air Lines said on March 18 that it would offer voluntary severance payouts to roughly 30,000 employees. Executives said then that the airline's goal was to cut 2,000 frontline, administrative and management jobs through the severance program, attrition and other initiatives.
The company said it would accept more job cuts, if more than 2,000 employees took voluntary severance.
Today the airline said that roughly 4,000 people took the airline up on its offer, and Delta will accept all the volunteers. The employees are from the mainline airline and Delta's information technology subsidiary. Most will leave the company in the fall.
Silverjet Officially Kaput
Looks like the rumors that Silverjet was about to resume flying were somewhat premature.
Today the airline said that it had laid off its entire workforce after attempts to put together a "rescue" deal for the airline fell apart.
The airline employed 370 pilots and cabin crew and 50 administrative staff.
The airline said it would continue to negotiate the sale of Silverjet's assets for the airline's creditors.
It's Friday The 13th -- Maybe a Bit Worse Than Usual
It's the dreaded Friday the 13th. Not that I have a thing about black cats or ladders or anything....
In fact there are two black cats who are cherished members of the PlaneBusiness Advisory board. The distinguished Max the Cat, and his mother, Mom Cat.
As for ladders, I'm too tall to walk under one without some difficulty, so that's never been a problem either.
Unfortunately, however, we understand that a lot of airline employees may have another reason to fear this Friday the 13th in particular. That reason is because it appears a lot of folks are either looking at their last day today at work (at United in particular) or others are expecting to find out today if they stay or if they go -- not only at United, but at other carriers as well.
Have a story to tell about your last day at work for an airline? Drop us a note.
June 11, 2008
Another Bad Day For Airline Stocks: Oil Moves Up on Weak Inventory Numbers
As of this posting nearly every airline stock we track is down on the day.
One big reason -- the price of crude is on the march again.
As of this writing, the price of crude is up more than $6/barrel, hovering around $137.60.
The main mover today is inventory news.
The Energy Information Administration reported today that crude supplies fell by 4.6 million barrels last week. Analysts were looking for a drop of only 1.4 million barrels, according to according to a poll by energy research firm Platts.
Related problem number two -- the dollar was trading down today as well.
Nice Comments on Midwest Airlines Crew
Thanks to our web editor and Apple computer consultant guru Jonathan Bare for that great post detailing his travails on his Midwest Airlines flights the other night.
As he said, with all the media emphasis on mergers, and high oil prices, and unhappy passengers, it's important to remember the human beings, just like many of you, who work for an airline -- who go over and above in trying their best to provide good customer service.
I ran into an example yesterday when I went to check in for my Southwest Airlines' flight in Phoenix.
As I noted here yesterday, the Southwest web site would not let me check in for my flight when I was still at home. So I just went ahead and left for the airport a bit earlier.
I got to the airport, attempted to check in using a kiosk. No go.
The kiosk told me I had to see a counter agent.
The counter agent told me I was on a cancelled flight and would have to stand in line for one particular agent -- only one of a few who could, for whatever reason, reaccommodate me. Yes, Southwest was having some kind of computer problem.
Things were a bit stressful. Especially for the counter agents who had the computers that could do something. Most of the terminals were not working correctly.
Actually even the one my agent was working on was only working so-so. She could put me on another flight to Vegas, but she could not give me a boarding pass.
She gave me some strange looking piece of paper to get through security with, and then I would have to stand in line again to get a boarding pass at the gate.
It was okay. I didn't mind that much, especially when she got me on an earlier flight.
But "C" concourse was a bit nuts. Then again, I'm just glad it wasn't a Friday.
But the thing I wanted to mention was that both my original counter agent and my eventual gate agent in the "C" concourse were doing the best they could, with phones ringing, computers that weren't working, and complaining customers in front of them. Even with all this, they were still smiling, and going out of their way to be apologetic.
I don't see how they (some of you) do it.
United Airlines Annual Meeting: Why Is It Being Held in Woodland Hills, CA?
The UAL Corp. annual meeting is tomorrow, and I still haven't been able to get a viable answer as to why the airline is holding it in Woodland Hills, CA.
Anyone have the answer?
Other than the fact that it almost guarantees that fewer unhappy employees are going to show up?
I mean, maybe American should take a clue here. Next year they could hold their annual meeting in Bangor, Maine.
One other note. We've been getting notes on and off for the last week from folks asking us if we have heard that Glenn Tilton, Pete McDonald, and Jake Brace are going to be leaving the company, effective with the annual meeting.
Dream on.
The UAL Corp. board is a Glenn Tilton hand-picked board, so I do not see this happening.
The second safety demo seemed better than the first...
SAN FRANCISCO -- In this day and age of continuous airline service, wage, staff, and in-flight cutbacks, plus a myriad of new fees, it's sometimes hard to remember that the industry is driven by humans.
We see the faces of the gate agents, baggage handlers, pilots, and flight attendants every day. But we also might forget that they're humans too. On Sunday night, June 8, I saw some of the brightest shining examples of airline employees doing everything they could to keep a plane full of passengers from bouncing off the walls in a riot.
I was one of those passengers on Midwest Airlines flight 421, scheduled to depart Milwaukee at 7:45 PM for Washington Reagan National Airport. I'll save you the suspense and spill the secret. We didn't get to DCA until 2 AM Eastern, having spent an extra three hours sitting in the plane, on the ground in Milwaukee, as waves of severe weather blew through. The radar image here shows the first line of storms about to hit Milwaukee, as we boarded and pushed back from the gate.
After finally making it back to DCA, I had another hurdle to face, a transcon trip to San Francisco for a conference, on a flight that left at 6 AM. Yep, four hours after landing, I was back in the air on a Delta flight to Atlanta where I connected to SFO. After being awake for close to 36 hours, I recounted my experience to Holly in an e-mail:
On the bright-side, we had a great crew on Midwest last night. They did everything they could to make it bearable. We had taxied out just before the storms went though, hoping to takeoff before the weather hit... but we got to the threshold of the runway and the wind really started to blow. So we parked out there for a couple hours. Brenda and Vicki [the flight attendants] served cups of water and warmed up the chocolate chip cookies for us.Finally we taxied back to the gate, and they made sure we got replenished with more jugs of water and a fresh batch of cookies for later in the flight. Vicki searched the terminal for any snacks they could serve us during the delay. The pilots and dispatchers worked for another couple hours getting a new route and more fuel loaded before we finally left. They were all amazing, and I can only imagine how other crews would have been after that much time in the plane dealing with us. "Nasty" and "unpleasant" are adjectives one might expect utilized to describe what might have been.
Brenda, the lead flight attendant, came on the PA after we landed and apologized and then thanked us for being the most patient plane full of passengers they'd ever had. In fact, I was in row 2 and there wasn't one single complaint or unhappy passenger during the entire delay. Several had questions about possible rebooking in the morning and one woman did get off when we got back to the gate, but nobody was impatient or rude... even though we definitely could have made it out before the weather if we'd pushed on time (we were about 10 minutes late out of the gate).
Brenda even managed to make many of us laugh and smile when she explained that they had to do the safety demo a second time, just in case we forgot in the prior three hours. (Of course, it's also an FAA requirement, she went on to clarify.)
In the end, it wasn't an experience I would want to replay anytime soon. Or ever. Or even wish on my worst enemies. But it's also nice to recount the tale and hope that Vicki, Brenda, the flight crew, and ground staff of Midwest 421 get some recognition for their amazing work Sunday night and early Monday morning.
Thank you.
June 10, 2008
Problems Checking In Online with Southwest Airlines?
Anyone else having a problem, or is this a personal thing?
I tried to check in earlier. No go. And I had, and have, more than an hour to go before my flight today.
Just tried again.
No go.
Anyone else having check-in problems?
Wings On the Road: ATME Conference
I'm back on the road again today. I'm off to Las Vegas where I will be speaking about the abysmal economic status of the U.S. airline industry, and the abysmal state of the economy as a whole, tomorrow at the Association of Travel Management Executives Travel Marketing Conference.
I thought about showing up in a dark robe with a scythe in my hand (you know, my attempt to be the Grim Reaper) but alas, I doubt Southwest Airlines would let me take the required implement (the scythe) on the plane.
Hope to meet some of you there. We can commiserate in tandem.
My thanks to Henry Harteveldt, VP and Principal Analyst at Forrester Research, who invited me to participate in the conference this year.
I don't know. With Henry and me in the same enclosed space, things could get pretty wild, as neither of us are known for our shy and retiring ways.
I'm looking forward to it.
First Mesa, Now Pinnacle; Delta Lowers the Boom On Another Regional Carrier
This morning Delta Air Lines announced that it intends to cancel its regional flying contract with Pinnacle Airlines, effective July 31.
Delta contends that Pinnacle did not meet minimum arrival-time performance requirements for a period since flights began late last year.
Pinnacle entered into a new capacity purchase agreement with Delta in April 2007 to operate 16 CRJ-900 aircraft as a Delta Connection carrier and began operations under the agreement in December. Pinnacle has currently taken delivery of nine of the 16 CRJ-900 aircraft on order.
For its part, Pinnacle says that there are many factors that are "out of the airline's control" when it comes to on-time performance. The operational schedule created by Delta is a key factor affecting on-time performance, Pinnacle CEO Phil Trenary told reporters today.
Under the capacity purchase agreement, Delta is required to collaborate with Pinnacle to create a mutually acceptable operating schedule. According to Trenary, Delta has created Pinnacle's operational schedule since the beginning of operations in December 2007.
"We are extremely surprised and disappointed that Delta is attempting to take this drastic and improper action," Trenary said today.
Not surprisingly, the news has not been kind to shares of Pinnacle stock, which are, as of this posting, down 28% on the day, trading at around 4.30.
Ticker: (NYSE:DAL); (Nasdaq:PNCL); (Nasdaq:MESA)
June 8, 2008
PlaneBusiness Banter Now Posted
This week's issue of PlaneBusiness Banter is now posted. Subscribers can access it here.
June 6, 2008
Is the APA Fantasizing or is American Airlines in Denial?
You know -- I figured that APA-created Top Ten List from yesterday was going to be problematic. it was too good.
As I said, the boys and girls on the communications committee of APA contend that American CEO Gerard Arpey flew on a corporate jet to Puerto Rico last week. And hence, the Top Ten List we posted here yesterday.
However, I got a note this morning from an American Airlines' employee reader who said Arpey never went. Then I sent a note to one of my APA acquaintances, who told me he did. Then I wander over and read Terry Maxon's blog today at the Dallas Morning News and he says that American is also telling him that Gerard never went.
Somebody is not telling the truth.
Anyone want to make bets on what the real story is?
Anyway, I still think the Top Ten list was funny. But I bet the underlying premise was bogus.
Maybe the truth will unequivocally sift to the top of the slag heap of airline lore by next week.
Ticker: (NYSE:AMR)
Technorati Tags: airlines, American Airlines
Jet Fuel Close: Pennies over $4....
....depending on where you're buying it. West Coast still seems to be the most expensive, with West Coast jet fuel apparently closing Friday at $4.14/gallon. Other markets are running $4.04-$4.08/gallon.
Oil Prices Surge Off the Charts To New Record High Price --$138.75
Ah, I'm not sure you want to look at the price of oil. Much less jet fuel.
But, I guess, alas, there is no choice.
After oil futures posted their biggest one-day surge in history yesterday -- $5.49 -- oil prices closed up almost $11 Friday, ending trading at $138.75/barrel after European Central Bank President Jean-Claude Trichet suggested the bank could raise interest rates. This news caused the euro to climb against the dollar.
As all good readers of PlaneBuzz know, when interest rates rise in Europe, or fall in the U.S., the dollar tends to fall against the euro. The falling dollar then also makes oil that much cheaper for buyers everywhere except the U.S.
The current record high of $135.09 was hit on May 22.
Prices were also pushed today by comments made by analyst Ole Slorer of Morgan Stanley, who wrote in a note that he expects a "short-term spike" in oil prices -- the result of rising demands in Asia.
I'll be back in a bit with an update on jet fuel prices.
I'd Prefer to Do My Own Scratching, Thank You Very Much
From today's ATA daily missive,
'"We're just scratching the surface of what we can do with whole-body imaging," said James Schear, TSA security director at Baltimore-Washington International Airport.'
Nah, I don't like the sound of this. At all. Haven't. And no, I'm sure the scanners don't automatically attach a little strategic piece of whatever that is in just the right place as shown in this demonstration film either.
This is no different than a virtual strip search, and I can't believe that we are going to allow the government to do this -- to us -- as a requirement for simply boarding an aircraft.
Technorati Tags: TSA, virtual strip search
Mesa Air Group CFO Leaves Company Abruptly; Still No News on Earnings
This morning Mesa Air Group filed an 8-K stating that on May 23, the company accepted the resignation of William Hoke as the Company’s interim Chief Financial Officer. Coincidentally, the resignation is effective today, June 6, 2008.
"Mr. Hoke has resigned to pursue another career opportunity" the filing said.
Uh-huh.
The filing continues, "Mr. Michael J. Lotz, the Company’s current President and Chief Operating Officer and Principal Accounting Officer, will serve as interim chief financial officer of the Company until a suitable replacement is found."
No mention of chief cook, bottle washer, and baby-sitter duties, but one has to think that perhaps those are a part of the new gig as well.
Notice there has still been no mention of when the airline is going to announce its earnings results for the quarter ending Mar. 31.
Which would then tend to lead one to believe that, with the departure of Hoke, we may not see these earnings details for awhile.
It's never a good sign when the CFO abruptly leaves a company when it has yet to report overdue earnings for a particular period of time.
Ticker: (Nasdaq:MESA)
Technorati Tags: airlines, Mesa Air Group
June 5, 2008
ExpressJet and Continental Kiss and Make Up
I'm telling you, the email bin is simply a never-ending source of strange and interesting news these days.
Tonight we find out that ExpressJet and Continental have apparently kissed and made up. SkyWest is, apparently, now, just a former potential suitor, thrown on the rockpile of other discarded airline flirtations.
Continental Airlines said late today that it has reached a new seven-year capacity purchase agreement with ExpressJet Airlines to provide regional jet service for Continental Airlines at rates that are lower than rates under its current agreement and more competitive with those offered by other regional service providers. The new agreement is effective July 1, 2008.
The base agreement covers flying by ExpressJet of a minimum of 205 regional jets in the first year and a minimum of 190 regional jets thereafter.
But while the rates paid ExpressJet are lower, here is the nice part for ExpressJet -- Continental has given ExpressJet the right to return 39 Embraer 50-seat regional jets that ExpressJet currently uses for non-Continental contract flying.
Continental plans to add the returned aircraft to the new agreement and withdraw from the agreement up to 30 of its Embraer 37-seat regional jets currently flown by ExpressJet for Continental.
Continental will then sublease or ground all of the withdrawn Embraer 37-seat regional jets to "better align regional capacity with current market conditions."
Just a small bit of corporate speak there.
Additionally, the agreement will reduce the rent Continental currently charges ExpressJet on 30 other regional jets that ExpressJet will retain for seven years to fly at its own revenue risk.
Ticker: (NYSE:CAL), (Nasdaq: XJT), (Nasdaq:SKYW)
Technorati Tags: airlines, Continental Airlines, ExpressJet, SkyWest
Live and Direct from the APA Communications Committee... Top Ten Reasons American Airlines' CEO Doesn't Fly American Airlines
What do they say? When times get tough, it's gallows humor that comes to the rescue?
Taking that frame of reference, a reader sent me a note this afternoon from an Allied Pilots' Association missive. (The APA represents the pilots at American Airlines.)
According to internal moles at the APA, Chairman and CEO Gerard Arpey chose not to fly on an American Airlines' aircraft when he recently traveled to San Juan. (Yes, the trip was for business, not leisure.)
Frankly, I personally don't care what kind of aircraft Gerard flies on -- but I had to tell you that piece of background information to get you to the punch line.
And now we're here.
Here are the Top Ten Reasons Why Gerard Arpey Does Not Fly On American Airlines -- thanks to the guys and gals at the Allied Pilots Association.
10. He refuses to fly on an airline that no longer offers peanuts.
9. Fearful he would be ejected in-flight by an angry mob of inconvenienced passengers.
8. Fearful he would be ejected in-flight by an angry mob of betrayed employees.
7. Fearful he would be ejected in-flight because his shoddy maintenance program results in a gaping fuselage hole.
6. Unlike any other passenger on American, he needs to arrive on time.
5. He refuses to pay the $15 bag fee.
4. On a private jet, he doesn't have to bring a "food taster."
3. AA employees have placed him on the "no fly" list.
2. He's implementing a new marketing logo: "American Airlines -- Service SO Bad, Even the CEO Won't Fly With Us!"
(Editor's Note: My choice would be, "American Airlines, We Know Why You Don't Want to Fly!"
1. He isn't worth the fuel it would cost to fly him there.
Oh my.
I like number 4, 5, 3, and 6 the best.
Ticker: (NYSE:AMR)
Technorati Tags: airline CEOs, airlines, American Airlines, Gerard Arpey
Oil Goes on a Tear; Jet Fuel Follows
Just when you thought it was safe to sign that contract for the Gulfstream....
Crude oil futures took off today, closing up more than $5, to $127.79. Jet fuel followed crude's lead, a