PlaneBuzz

We hear from one of our Southwest Airlines' friends that the pilots at Southwest, who are represented by their own independent union, SWAPA, and the airline, have come to terms on a new tentative agreement.

Here is an excerpt from Carl Kuwitzky's blog that was blasted to pilots this afternoon. Carl is the President of SWAPA.

"Last night SWAPA agreed in principle on a new five year contract with the Company through August 31, 2011. This new contract includes the following: stronger scope language as well as codeshare restrictions not previously released including no domestic codeshare, increase in pay rates including retroactive pay, increase in 401K match, improved disability program and streamlined/improved scheduling and work rule language. Additionally we have retained the Lance Captain program and ELITT albeit with changes to current language. Our Negotiating Committee (NC) is continuing to negotiate final language and when that work is completed will present a Tentative Agreement to the BoD for approval. If the BoD approves the new contract it will be sent to the membership for final ratification. I anticipate a BoD meeting in late February or early March to review the TA."

This news comes as it was announced today that the mechanics at the airline approved their proposed TA with the airline by a 61% majority.

Posted by Holly at 3:04 PM | Permalink | Comments (0)

The headline on Gary Chase's research wrap-up piece today was entitled, "Thoughts After A Tiring Airline Earnings Season."

That is exactly how I feel today, after the onslaught of reports this week. Particularly yesterday's almost non-stop roll out of reports.

Chase, airline analyst with Barclays, commented today, "Mercifully, airline earnings season is over."

Not quite. We still have a number of regional airlines to hear from. Then there are all the international carriers who report on a very different schedule. But as far as the big guns in the U.S. are concerned, yes, the noisy din that was created from a slew of very "noisy" earnings reports this quarter has now, finally, ended.

I'm still not sure which airlines we are going to take a closer look at in this week's issue of PBB, because we had too many report in during the week. The issue would simply be too unwieldy in terms of size if we were to go into our usual detail on all eight. But after finishing up the last earnings transcript reading this morning, I'll pick four for this week, and the rest will get their look-see next week.

But let's get away from the specifics for a minute and look, as Gary did today, at the overall sense we got from listening to the calls over the last two weeks.

I'd sum it up by saying this: there is a lot of fear out there concerning demand. The immediate revenue landscape looks frightening and it's not clear where the revenue versus demand level is going to settle. And god forbid if the price of oil starts to move up again.

As Gary said in his note this morning,

"We have entered the stage of the airline story where the thesis gets tested. We all know it takes a lot of revenue erosion to offset the benefits the industry will reap from extraordinary capacity reductions and breathtaking declines in fuel (now materially more than 9/11). However, now comes the hard part. The part where we actually have to observe the revenue declines rather than analyze sensitivities in our models. With revenue fading quickly, as it always does, faith is suddenly hard to come by.

The near-term isn’t going to be easy, in our view. The next potential catalysts will likely come on the revenue front and as CAL previewed yesterday, the RASM comps are going to be negative. In fact, our largely unchanged forecasts contemplate negative RASM comps in every single month of the year, with the exception of November. We currently believe 1Q will see the toughest comparisons."

Translation? If you thought the fourth quarter numbers looked bad -- just wait until mid-April when the first quarter numbers roll out.

However, as far as we can tell -- most analysts continue to hold onto the belief that the benefits that come from the drop in the price of oil will more than compensate for whatever drop in demand the airlines continue to feel.

One PlaneBusiness Banter subscriber wrote me this week, "I think these guys on Wall Street are not connected to the real world. In your last issue in December you asked your readers to tell you how they felt about 2009. And you said yourself that you were surprised at the overall level of negativity readers expressed. I wasn't. And I think your readers were, and are, closer to the mark than these guys who make their living transposing spreadsheets and getting lost in the numbers are."

Thoughts? I think it's time we open this up to PlaneBuzz readers for their take. Is 2009 still going to be the blockbuster earnings year for the airline industry that every Wall Street analyst on the planet said was going to be the case?

As always, you can comment here on Buzz -- or you can send your notes to me directly.

Posted by Holly at 11:34 AM | Permalink | Comments (0)

Eureka. It's about time.

"The Department of Transportation’s Bureau of Transportation Statistics today upheld its June 2008 decision to release to the public traffic, financial and origin and destination survey data filed by Virgin America.

            BTS denied an appeal by Virgin America of the June 26, 2008 decision by BTS’ Office of Airline Information on the airline’s request to keep the data confidential.   

            All filings on the docket DOT-OST-2008-0107 can be found on Regulations.gov: http://www.regulations.gov/search/index.jsp

            BTS also denied appeals from Republic Airlines and Shuttle America.  The two airlines appealed a previous denial of their confidentiality requests.  Documents for these cases can be found on Regulations.gov:

Shuttle America: DOT-OST-2005-23354

Republic Airlines: DOT-OST-2005-23355"

Readers will recall that Virgin America has refused to make its DOT financial and O&D information available ever since it began operation. The reason? We can only assume that it didn't want us all to know how much money it was losing. And on what routes.

So the airline played the legal "wait it out" game by first refusing to do so, saying that it would be forced to "reveal confidential information" if it did so. That set in place a legal process that took time. In June the DOT ruled against the airline, but again, an appeal was filed.

So now, finally, we will all get to see the numbers that we should have had access to all along. On February 3. At 10:00 AM EST to be exact.

Oh, and yes, Republic and Shuttle America have been playing the same game. Their gig is up as well. Their numbers will also be available as of Feb. 3.

This whole thing is ridiculous. There should be changes made immediately to the process that prevents airlines from "opting" out of the reporting process. If they don't report -- their right to fly is yanked. Period.

Posted by Holly at 10:31 AM | Permalink | Comments (0)

Delta Air Lines was not the only airline that reported earnings yesterday.

One of our PlaneBusiness Banter stock faves, Allegiant, took its turn at the 2008 Fourth Quarter Confessional. The big difference with Allegiant? There were no "Hail Marys" proscribed as penance for their less-than-satisfactory performance.

Quite the opposite.

The airline with the screwy business plan once again posted what I thought were very strong earnings. Allegiant Travel Co., the parent of Allegiant Air, reported that earnings nearly quadrupled for the quarter, on 21% higher revenue.

The company posted earnings of $18.2 million, or $0.88 a share. This was up from $4.8 million or $0.23 a share the year before.

Operating revenues were up 21.3% while operating expenses were down 1.2%. The airline saw operating income soar 373.6%.

And remember what the price of oil was doing during the fourth quarter. Then remember that yes, these are the guys who fly those gas-guzzling Maddogs. (MD-80s).

Load factor? Up a sizzling 8.8 points over the fourth quarter of 2007 -- to 86.5%.

And the astonishing results just continue to go on and on and on.

I'll take a full look at the airline's results and talk about their earnings call in this week's PBB.

In the meantime, kudos to the management at Allegiant. I've said this before, and I'll say it again -- this is one of the few management teams in this industry that knows who they are, what their business model is, and how their airline makes money. Or doesn't.

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

This is great news.

As I had written in PlaneBusiness Banter in December, it did appear that Delta Air Lines and its pilot union were close to coming to an agreement which would see the airline reinstate its Aviation Safety Action Program.

This morning the airline announced just that.

From the airline's release:

"Delta Air Lines (NYSE: DAL) has signed a memorandum of understanding with the Air Line Pilots Association (ALPA) and the Federal Aviation Administration (FAA) to reinstate its Aviation Safety Action Program (ASAP) covering pre-merger Delta pilots. The revised program mirrors an existing Northwest Airlines pilot ASAP program."

In addition to the reinstated pilot ASAP, Delta has formal ASAP programs in place for its dispatchers and Technical Operations employees, and other safety reporting programs for flight attendants and ground employees. Delta also will continue ASAP programs currently covering pre-merger Northwest pilots, dispatchers and load planners, and other safety reporting programs for its other workgroups.

This means that almost 17,000 employees of the airline are now covered by some form of voluntary safety reporting system at Delta.

Excellent news. Just makes me want to do a little happy dance outside. Only problem is that if I did, I'd probably fall on the ice and break a limb. So -- happy dance will be postponed until it's a little warmer. (Yes, I'm at the Dallas-Ft.Worth branch office this week.)

We have two more major airlines and their pilots groups to beat into submission in regard to ASAP participation. And we all know which two airlines I am talking about. American Airlines and US Airways.

And no, as I told my PBB subscribers not too long ago, I'm not going to shut up until the last two stragglers are back in the fold. ASAP program participation is too valuable to all concerned.

Posted by Holly at 12:33 PM | Permalink | Comments (0)

While analysts continue to wax poetic about revenue forecasts for the industry in 2009, the market took a baseball bat to many of the major airline stocks today -- after Delta Air Lines rolled out its disappointing numbers for the fourth quarter.

This morning Delta reported it lost $1.4 billion in the fourth quarter or $2.11 a share. This compared to a loss of $70 million or $0.18 a share for the previous year. This number included $904 million in charges related to employee equity awards that were a part of the Delta/Northwest deal.

Excluding special items, Delta lost $340 million or $0.50 a share. This was much worse that the $0.34 figure that had been forecast in the analyst consensus. However, Delta said that the analyst consensus figure did not take into consideration a 12 cent per share loss related to the "non-cash impact of purchase accounting."

Okay.

But as bad as these numbers were, this was not the news that has pushed shares of Delta, and other airline stocks to the floor today.

The news that is doing that is the "forward guidance" comments the airline made today.

You know .. little things like...."unit revenue projection is much worse than what had been previously suggested." When it was "previously suggested" ...in December.

Traders don't like to hear things like that. If those forecasts are that far off after only one month, that is not a good omen.

As a result, shares of Delta are taking a sharp dive today, down 20% as I write this, trading at around 7.95.

And because what affects one major airline is assumed to affect all of them to one degree or another, shares of US Airways are also getting punished, as they are down 17%, trading at 6.36. Shares of AMR are not exempt, as they are now trading down 13%, hovering around the 6.27 mark.

Shares of Continental are not being left out of the carnage today either. Shares here are now trading down about 16%, at 14.17, while shares of United are trading down 11%, around 10.85.

Posted by Holly at 1:18 PM | Permalink | Comments (0)

PlaneBusiness Banter Subscribers can now access this week's mega-earnings issue here.

Posted by Holly at 9:47 PM | Permalink | Comments (0)

I'm working on this week's PBB. This week's Market Review section to be more specific.

Just thought that it was worth noting that while shares of Southwest Airlines bounced around all over the place this week -- when all the shouting was over, shares of the Dallas-based airline ended down 7% for the week, closing today at 8 bucks even.

They were not even a member of the select PlaneBusiness Basement Double-Digit Loser Group for the week.

No, the airline stock that took the award for posting the biggest loss for the week was AMR, parent of American Airlines, which saw shares drop a hefty 33% for the week, ending the week at 7.62.

This was far and away the worst performance notched by an airline this week, although Continental Airlines was down 17% for the week, closing at 17.22, as it took second place honors at the bar in the basement.

Other major airlines to post a double-digit decline for the week were Alaska Air Group, which was down 11%, closing at 26.56, and Delta Air Lines, which lost 10% to close at 10.26.

The vast majority of stocks we track at PlaneBusiness finished down for the week. The reason? The price of oil once again raised its ugly head as the week came to an end.

Oil futures closed Friday at 44.65/barrel -- up 22% for the week.

Ouch.

I told you guys OPEC was going to get serious about cutting production this time. And....they seem to be doing just that.

Posted by Holly at 6:14 PM | Permalink | Comments (0)

Tough crowd out there today.

From the inbox:

"You are not serious about this whiny crap from UA pilots are you?"

Heh.

Let me put it this way. Given what is going on at the airline -- I would have expected the airline to have at least discussed this "innovative agreement" with its pilot union before it was announced. At least.

Actually, I'm more interested in an arm-wrestling contest between Ryanair's Michael O'Leary and United's Glenn Tilton.

I'd pay big bucks for that ticket.

Posted by Holly at 3:30 PM | Permalink | Comments (0)

Take one major airline.

Have that major airline use bankruptcy as an excuse to destroy its employee pension plans.

Have same airline continue to enjoy some of the most adversarial management/employee relations in the industry.

Add just one more objectionable move on the part of said airline's management to the almost-boiling pot.

Stir.

Back off and watch as the pot boils over.

Today that is exactly what has happened, as United Airlines' pilots are reacting to the news that the airline plans to link-up with Irish airline Aer Lingus to offer flights between the U.S. and Madrid. Say what?

Starting next year, both airlines will market the flights and each airline will have their own flight numbers on the route.

But United Airlines' employees will have nothing to do with the actual operation of the flights.

No, Aer Lingus will fly the planes with their crews. And provide the planes. United will handle the marketing for the flights.

According to a report in Bloomberg, "Aer Lingus and UAL will review the partnership after two years and may turn it into a 'full-blown joint venture,' with the Irish carrier owning 51%."

Not surprising that the United pilots are not happy about this news. Looking at the details of the deal this looks like nothing more than a glorified wet lease.

Meanwhile, United Airlines continues to sit on a stagnant-to-declining fleet, and continues to announce furloughs for its own pilots and flight attendants.

In a message from the Chairman of the airline's ALPA MEC, Steve Wallach told the troops,

By the way, we all should have known that Ryanair's CEO Michael O'Leary wouldn't sit around and be quiet on this development. As most of you know, Ryanair is in the middle of yet another hostile takeover run at Aer Lingus.

Today Ryanair issued a statement in which O'Leary said, "

"Aer Lingus and United Airways share many similar traits. They both used to be big in the 1950's and 1960's, but sadly today they are just shadows of their former glory. Both have recently announced losses, job cuts and pay cuts. After months of trawling around looking for partners, it is a sad reflection on Aer Lingus that the best they could come up with is one of the weakest and biggest loss makers in the U.S. airline industry. Given the scale of United's losses there is no guarantee that they will even be around in March 2010 to operate this "partnership".

"It is hard to think of any transatlantic airline losing any sleep at the thought of being faced with the combined weakness of Aer Lingus and United Airlines on the Madrid-Washington route. Today's announcement shows just how desperate Aer Lingus is to find a partner, any partner it can, even if the flights don't start until March 2010. This so called "partnership" with another "loser" like United shows that Aer Lingus has no independent strategy, and no prospect of remaining independent."

Posted by Holly at 12:46 PM | Permalink | Comments (0)

I've had a couple of emails this morning from readers wondering why Southwest Airlines' shares, which rose yesterday on the news that the airline was essentially shutting down the growth faucets, are now moving in the opposite direction today.

As of this posting, shares of Southwest have lost 17% for the day, now trading around 8.10 a share, down from their close yesterday of 9.81.

So what gives?

Simple. The market reacted positively yesterday to the headline news: growth being curbed.

Today, investors have had more time to think about the rest of the news the airline gave us yesterday. And, investors have also had the benefit of a number of airline analyst research notes on the results.

From Gary Chase, analyst with Barclays:

...LUV results were better than we expected, largely on better passenger revenue performance. Non-fuel costs came in a touch better, but remain under pressure. We expect LUV will benefit from industry capacity reductions and lower fuel prices, but don’t see nearly as compelling an opportunity in LUV shares as we see in other names.......2009 estimate is reduced from $0.65 to $0.45, principally on lower passenger revenue assumptions.We’ve been modeling RASM out-performance for LUV relative to other LFCs and the industry at-large given its revenue initiatives, but think it will be increasingly difficult for the company to outperform the industry to that extent given economic slowing."

..."Our view on the stock

We view LUV’s valuation as getting stretched. It is trading at we view as an ‘okay’ 6x 2009 EV/EBITDAR but a robust 16x our 2009 EPS estimate. With growth non-existent, unit costs rising, economic fuel prices above peers and the balance sheet okay but less impressive, we question whether there is upside potential to valuation from here. We are cautious on LUV and rate it Neutral..."

From Ray Neidl, Calyon Securities:

"We believe investors should take profit," Neidl said in a research note this morning as the firm dropped its target price on the shares from $8 to $7. The firm also cuts its rating on the stock from underperform to "sell."

When was the last time we saw a "sell" rating on shares of Southwest?

Posted by Holly at 11:59 AM | Permalink | Comments (0)

Southwest Airlines was the third major airline to report earnings this quarter, as the airline rolled out their results this morning.

The verdict?

The airline posted its second quarterly loss in a row.

The reason? Just as we saw with American and United yesterday -- getting caught on the wrong side of the hedges. Fuel hedges that is.

Including special items, the airline posted a loss of $56 million or $0.08 per share. Last year the airline posted a profit of $111 million or $0.15 a share. Excluding special items, the airline posted a profit of $61 million or $0.08 a share. This compares to last year when the airline posted a profit of $87 million or $0.12 a share.

For the year, the airline posted net income of $178 million. This compares to 2007, when the airline posted net profit of $645 million or $0.84 a share. Excluding special items, full year 2008 net income was $294 million or $0.40 per diluted share, compared to $471 million, or $0.61 per share in 2007.

While these numbers would not look like numbers that would push shares higher -- shares in the airline are now up about 17% on the day. Why?

The quarterly numbers are not what is pushing the shares higher.

The fact that CEO Gary Kelly came out and said that growth at the airline has been "suspended indefinitely" is the reason the shares are up.

I know, it's convoluted.

But in the world of Wall Street -- the biggest fear was that Southwest would NOT make a serious attempt to cut back on growth. Since the airline now seems determined to do so -- that is seen as a positive. It is anticipated that fewer ASMs will result in higher loads and better revenues in 2009.

"I definitely want Southwest Airlinesto grow," CEO Gary Kelly said on the airline's conference call today. "I believe we will be able to grow, but that is certainly a secondary objective in this kind of an economic environment."

The airline has now reduced its 2010 Boeing delivery schedule of new aircraft down to 10. The airline previously had 16 aircraft on firm order and six options for the year.

Southwest ended December with 537 aircraft. It expects to end 2009 with 535 -- as lease expirations and retirements cancel out the 13 new Boeing 737-700s now expected to be delivered during the year.

Posted by Holly at 3:04 PM | Permalink | Comments (0)

The future does not bode well on the cost side.

We wrote earlier today that while we thought United Airline's numbers today were worse at first blush, that investors were punishing shares of AMR much more severely.

Here's why.

The airline gave what could at best be called less than encouraging cost guidance for 2009.

Analysts Jamie Baker and Mark Streeter with JP Morgan issued a note today concerning the results in which they said,

"Unlike UAUA, We’re Discouraged By AMR Cost Guidance – Pension expense appears to lie at the heart of what we consider to be discouraging 2009 ex-fuel cost guidance from AMR, a phenomenon that may have implications for CAL & DAL, though not LCC or JBLU. Specifically, AMR is guiding to a 2009, consolidated ex-fuel CASM increase of 7.6%, materially higher than our ambitious +4.1% forecast and representing over an untaxed dollar in negative earnings variance – holding other inputs constant. On the fuel side, Q109 $2.04/gallon all-in guidance is consistent with our $2.10, as is AMR’s full-year $2.06 all-in (identical to our forecast)."

And while United Airlines has garnered the most negative publicity over the last month or so concerning the high cost of its ill-placed fourth quarter fuel hedges, AMR got hit in the fourth quarter as well.

As Jamie explained,

"Similar to UAUA's release this morning (and to what we expect to hear from those who have yet to report), AMR's liquidity was clearly hurt by incremental cash collateral deposits posted with fuel hedging counterparties. AMR ended 4Q08 with an unrestricted cash balance of $3.1 billion, compared to $4.6 billion as of 3Q08. The implied $1.5 billion sequential net cash burn was driven by the company's cash collateral postings on under-water fuel hedges ($575 million in cash collateral with counterparties at the end of 4Q08), debt and capital lease principal payments, capital expenditures, and changes in working capital (exact figures for debt amortization, capex, and change in working capital were not disclosed in the press release). At the end of 3Q08, AMR held $240 million in cash deposits from fuel hedge counterparties, but with falling oil prices during 4Q08, the company saw a reversal of approximately $815 million, resulting in the $575 million figure mentioned above. The worse than expected pension cost guidance is worth monitoring. Nevertheless, we expect AMR's liquidity profile to improve significantly in 2009 as under-water hedges roll-off and the airline is able to benefit from much lower y/y oil prices."

Posted by Holly at 9:06 PM | Permalink | Comments (0)

Rough day on Wall Street for many airline stocks today -- with two big factors pushing down shares. One -- March futures options opened today for crude oil. And off they went.

Oil closed up almost $3 to 43.55/barrel today.

But it wasn't because of a surprise EIA energy supply report. That report, which is normally issued on Wednesday, won't be issued until tomorrow -- because of Martin Luther King Jr.'s Monday holiday observance.

Another factor pushing down shares were the earnings reports for American Airlines and United Airlines.

Shares of American are being hammered, with shares now trading down about 25% for the day. Shares are hovering around 7.85.

Shares of United, which actually posted what I thought were the more negative numbers for the quarter, are down a little over 7% as of this posting, with shares running around 10.78.

But other stocks are taking the day's news hard as well. As of this posting, shares of JetBlue are down 12%, trading at $6.25, while shares of Delta are down 12%, trading at 9.73.

Shares of Continental are not having a good day either, as shares here are down 13% as of this posting, trading at 16.98.

Posted by Holly at 2:37 PM | Permalink | Comments (0)

It's that time once again dear friends. That time when we get the straight scoop on just how bad, or how good, the previous quarter was for our friends, The Things With Wings.

This morning both AMR, parent of American Airlines, and UAL Corp., parent of United Airlines, reported their fourth quarter 2008 earnings.

Top line assessment? Both airlines reported numbers that came in comfortably within previously anticipated analyst forecasts.

That does not mean, however, that the numbers were overly pleasant to digest.

Especially in the case of United, which reported a net loss of $1.3 billion or $9.91, compared with a loss of $53 million or $0.47 a share the previous year. Excluding non-cash, net mark-to- market hedge losses and certain accounting charges, the airline reported a pre-tax loss of $547 million for the quarter. This figure compares to an adjusted pre-tax loss of $105 million in the fourth quarter of 2007.

A huge contributing factor here was the fact the airline got caught on the wrong side of some very expensive hedge positions during the fourth quarter. The effect of this wrong-way bet was clearly seen in the sharp drop in the airline's cash balance for the quarter.

At the end of the quarter, United was sitting on only $2 billion in unrestricted cash, a restricted cash balance of $272 million, and $965 million in cash deposits held by its fuel hedge counterparties. The airline saw $989 million in cash go out the door during the fourth quarter in operating cash flow and it posted a negative $1.1 billion in free cash flow during the quarter.

Excluding one-time items, the airline said it lost $4.22 per share compared with Wall Street analyst consensus forecast of $4.42.

In the case of American, the airline reported a loss of $340 million or $0.77 a share, excluding special items. This performance was more or less in line with expectations as well.

A year ago the airline reported a loss of $184 million or $0.74 a share, without special items.

The full American Airlines' release has yet to hit the wires.

We'll also learn more about the results from both airlines later today, after their respective earnings calls.

In the meantime, go have some more coffee.

Posted by Holly at 9:14 AM | Permalink | Comments (0)

Subscribers can read this week's issue of PlaneBusiness Banter here.

Posted by Holly at 6:38 PM | Permalink | Comments (0)

Click here to see a great Coast Guard video of the US Airways flight touching down in the Hudson, the speedy evacuation and the equally speedy first tug boat arriving to help.

Unbelievable.

The plane touches down on the water at about 2:02 into the tape. She will be coming in on the left hand side of the screen.

It's amazing how fast everyone got out and onto the wings and how fast help arrived.

Posted by Holly at 10:17 AM | Permalink | Comments (0)

As of this posting, airline stocks are mixed in trading today as the market has turned downward as a result of more bad banking news.

Why anyone in the market would think that all the bad news about banks was already "out there" is beyond me.

Today Citibank and Bank of America are the two hot topics du jour.

But for the airlines -- there is a bit of very good news.

As more estimates of energy demand continue to trickle in -- and as the numbers continue to show a growing drop in that demand being forecast -- the price of crude oil continues to drop.

As of this posting the price of crude is trading at around 34.64/barrel. Can you believe it? Yep, it's true. Happy days are here again folks!

Well, maybe not. But in terms of airline economics -- this is very good news.

Biggest loser as for the airline sector as of this posting is Mesa Air Group. The stock is down about 11% for the day as we post this -- hovering around 18 cents and change.

Posted by Holly at 11:54 AM | Permalink | Comments (0)

A number of news sources are reporting tonight that Chesley B. "Sully" Sullenberger, III, was Captain of the US Airways' flight that was successfully ditched today in the Hudson River.

It seems that Captain Sullenberger has a website. Actually the website is for his consulting business -- Safety Reliability Methods, Inc.

It would appear the guy knows his stuff.

Posted by Holly at 6:53 PM | Permalink | Comments (0)

Okay, if you are a pilot, you already know this.

But I didn't know that the Airbus aircraft apparently have a "ditch" button in the cockpit that automatically closes any vent, air outlet, opening, whatever, to the outside, in preparation for a potential water landing.

Just listening to Greg Fieth, former NTSB investigator, on NBC talking about how this works.

Pretty interesting. I was not aware of this. Clearly today that might have been helpful, as the aircraft stayed above water long enough for everyone to get off.

All you Boeing fans out there -- do they have something similar on Boeing aircraft?

Posted by Holly at 5:51 PM | Permalink | Comments (0)

Yours truly was minding her own business this afternoon, driving back home from Ft. Worth at 75 miles an hour, when all of a sudden I start getting messages about a US Airways plane that had ditched in the Hudson on my phone.

Now, being the card-carrying airline geek that I am -- you can only imagine that it was a miracle I got home and did not run into anyone while I drove and tried to 1) get my emails 2) get online and/or 3) find out what had happened.

According to reports, US Airways' Flight 1549 took off from LaGuardia to Charlotte at 3:03 PM Eastern time. Reports say that the pilot reported a "double bird strike" and apparently the crew felt it necessary to put the aircraft down in the Hudson.

Listening to NPR just now, the reporter there interviewed one of the passengers who said the plane essentially "glided in" on the water. As you can see in this photo, the aircraft remained floating, and passengers were rescued from the wings and the top of the aircraft.

What is unbelievable is that all reports say that all passengers and crew were rescued.

We can only hope that this is the case.

If so -- well done and kudos to the flight crew.

I'm sure we'll all know more as the evening goes on.

PHOTO/NBC NEWS

Posted by Holly at 5:23 PM | Permalink | Comments (0)

Whoa. Who is this handsome man?

We knew Delta Air Lines was serious about creating a real honest-to-god communications department when they hired away veteran Ned Walker from Continental Airlines.

Today that fact was made apparent once again as the airline announced that Ed Stewart has been named head of external communications for the airline.

Ed, who is currently a senior vice president at Fleishman-Hillard in Dallas, is most well-known for his 16-year stint at Southwest Airlines.

Having personally dealt with Ed many times during his time at Southwest, I can say, without question, that he was one of the best PR spokespersons any company could have asked for. Notice I said any company. Not any airline.

In terms of airline PR, he was so far ahead of the pack it wasn't even close.

Nice move. Both for Ed and for Ned and ....Delta Air Lines.

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

Okay loyal readers. I have a task for you to do today.

Today is the last day you can vote in this year's "Weblog Awards."

Brett Snyder's blog Cranky Flier, has been nominated for best travel blog. As of this posting, he trails "My Kugelhopf" by a little more than 100 votes.

As you all know, Brett is a friend of the PlaneBusiness empire, and well, even though the whole concept behind the Weblog awards is nothing more than a glorifed beauty contest -- there's no question that if you win, it can give your site some nice added attention. And in the case of Brett, who does not have a subscriber publication to pay the rent -- but just the blog -- added attention is about the best thing you can ask for.

Go vote.

I would say vote now, vote often. But each IP is limited to one vote a day. And today is the last day.

So one vote will suffice.

But if you want to run around your office and vote from every computer, that would be fine too.

Yes, that's me and that's Brett at last fall's Southwest Airlines' Halloween festivities. Brett dressed as a Canadian Mountie, in honor of Southwest's link-up with Canadian wunderkind WestJet. He also awarded free Molsons from his backpack to deserving Halloween skit participants. A truly selfless act.

Posted by Holly at 11:50 AM | Permalink | Comments (0)

How is everyone today? I can tell that life is almost back to normal this week. The holidays, I think, are finally behind us all.

How can I tell? Because I have already received a raft of emails from readers of this week's PBB.

Last week our email total was good, but it took awhile.

Today, the email bag is busy right off the bat.

I've also received a number of interesting non-airline related emails this morning.

Such as?

One reader wants to know if I am going to be in New Orleans this upcoming weekend for Pardi-Gras.

If you are a Parrothead, you know what Pardi-Gras is. It's an excuse for Parrotheads to get together in New Orleans, drink heavily, and hope that Jimmy Buffett decides to show up.

No, not really. Everyone has a good time whether he shows up or not.

Sounds like a winner to me.

Unfortunately no, I am going to be in the DFW metroplex this weekend. No margaritas for me.

Another reader writes to ask when the official party is going to be -- to celebrate the official opening of the PlaneBusiness branch office.

I think you guys have one thing on the brain today.

Good question. It certainly can't be at the branch office. That would severely curtail the number of potential guests.

I'll have to work on this. But, as our one subscriber commented this morning, "It would be unairline-like not to have a party."

How true.

Posted by Holly at 12:27 PM | Permalink | Comments (0)

Subscribers can access this week's issue of PlaneBusiness Banter here.

Posted by Holly at 12:17 AM | Permalink | Comments (0)

Oops. Members of the US Airways' fan club sent me notes last night asking me why it was I hadn't talked about their traffic numbers in yesterday's post.

Okay, okay. Nothing intentional. I simply forgot. Quiet down!

Actually US Airways posted pretty darn good traffic numbers for December.

US Airways said Wednesday that its mainline RPMs were down 1.1% for the month, against a capacity shrinkage of 6.4%. Ding, ding, ding. You know what that means.

Yep. It means that load factor went up. And by a healthy 4.4 points to 80.3% -- which set a new record for the airline.

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

One of the more unfortunate news items while we were on holiday hiatus was the crash of Continental Airlines' Flight 1404, which apparently tried to take off from Denver International, but instead found itself careening off the runway, ending up in a ravine on the edge of the airport. Minus one engine and its landing gear. And on fire.

While we all saw photos of the wreckage in the days after the mishap on Dec. 20, and while I think most of us were amazed that everyone onboard had escaped -- when you look at this slide show posted by Denver Channel 7 News, you'll be even more amazed that there were not more casualties.

Warning: These are powerful images.

Posted by Holly at 3:32 PM | Permalink | Comments (0)

If it's the first week of the month, that means it's time for airline traffic reports.

And it's time for all of us who look at them with a jaundiced eye to try and figure out what they mean. Actually all they mean is that for the month of December a particular airline did this.

In this environment, the question of whether they portend any kind of trend or not is a rather risky assumption.

The good news overall is that demand held up fairly well in December for the most part. However, one caveat. Remember that for the purposes of the reporting month, the backend of Thanksgiving travel fell into the "December" reporting month this year.

In addition to the usual traffic reports, Continental Airlines also issued its RASM estimates for the month. On that front, the news was not bad either.

Commenting on both topics, JP Morgan analyst Jamie Baker wrote this week,

"Demand weak but steady, for now. November was a noisy month, requiring yr/yr adjustments for the portion of Thanksgiving travel falling in December and a higher November weekend-to-weekday ratio (weekend revenue production is typically penalized by lower business travel). Additionally, disproportionate leisure demand in the final two weeks likely resulted in higher revenue retention as weather deteriorated across much of the country (vacationers are more apt to push on, whereas business travelers give up more easily – as did this analyst in the week before Christmas). So while December offers no assurances as to F2009’s demand outcome, the aforementioned adjustments do suggest that while weak, December does not appear to have gotten any weaker than November for Continental. Furthermore, given Continental’s recent relative RASM outperformance, our ATA December mainline RASM forecast of 2.5% does not appear to be in jeopardy."

In terms of Continental's RASM performance, Jamie added, "December better than feared. Continental December mainline and consolidated RASM rose 4.5% and 4%, respectively, a respectable outcome versus our more dire +1% consolidated forecast. Based on the midpoints of this guidance, consolidated revenue fell 4.5%, while yield rose 2.4%. Additionally, November’s initial 1.5% consolidated RASM midpoint was slightly lowered to +1.2%."

As for the basics, Continental reported that consolidated RPMs were down 6.7% while capacity was down 8.1%, resulting in a 79.9% load factor, up 1.2 points from December of 2007.

United Airlines

RPMs were down 11.5% in December, as the airline slashed capacity by some 12.7%. This resulted in a load factor of 79.9%, an increase of 1.1 points from December 2007.

Note for you trend watchers: The airline reported that traffic fell faster on its Pacific and Atlantic routes. (More ammunition for the idea that the glory days of continued international growth are coming to a screeching halt.)

Southwest Airlines

RPMs were up 1.1%, while capacity declined 1%. This resulted in 1.5% increase in load factor.

This was a nice rebound from Southwest's rather anemic November numbers.

Allegiant Airlines

RPMs were up 9.6% while capacity was down 2.6%. Ah....now here are some healthy numbers.

This resulted in the airline posing an 88.7% load factor, up from 78.9% last year. That's a 10.2 point increase - the largest posted so far by a U.S. carrier.

Delta AIr Lines

Delta reported that RPMs were up 0.7% for the month, while capacity was down 2.4%. This resulted in a load factor increase of 2.4 points over December 2007 numbers.

Again, however, as we saw with the United numbers, the international numbers were not too pretty. The airline reported that international RPMs were up 9.2%, but capacity was up 13.7%. This resulted in a decline in load factor of 3.2 points.

American Airlines

American reported that both domestic and international traffic declined in December, unlike United and Delta, which both posted increases in their domestic traffic.

This makes sense, in that American is taking a bigger hit because of its previous heavy investment banking/Wall Street trans-Atlantic business. A fact the airline supported by its comment that its sharpest decline in international traffic was on the trans-Atlantic segment, which was down 8%.

The airline reported that domestic RPMs were down 9.6% while capacity was down 11.8%. Meanwhile international traffic was down 5.7% on a capacity reduction of only 3.2%.

Overall, the airline ended the month with a 79.2% load factor, up 0.4 points from December 2007.

AirTran

AirTran saw RPMs up 2.3% in December, while capacity was down 6.9%. This resulted in a very nice increase in load factor for the month -- up 7.1 points to 79.8%.

Posted by Holly at 1:59 PM | Permalink | Comments (0)

I received a handful of notes today from readers asking me about the sharp drop off in the price of Allegiant Travel Company shares.

As you can see by the chart the stock took a beating today on the street.

So what gives?

Nothing to worry about as far as I can tell.

This stock is proving itself to be a classic airline "trading" stock, and as such whenever the folks who have ridden the stock get the feeling that the good times may be over for the time being -- it's time to sell.

And with all the press the stock received over the weekend in regard to its stellar 2008 performance, that is a classic signal for traders to sell. And sell they did.

It's not, as far as I can tell, a fundamental issue of any kind.

Nor have we heard rumors of CEO Maury Gallagher suffering from any kind of "hormonal imbalance."

Posted by Holly at 6:57 PM | Permalink | Comments (0)

This week's issue of PlaneBusiness Banter is now posted.

Subscribers can access this week's issue by clicking here.

Posted by Holly at 5:52 PM | Permalink | Comments (0)

When all was said and done, and the crystal ball descended in Times Square Wednesday night -- I know that you were, just as I was, chomping at the bit to know the answer to one burning question.

Which airline stock was the top performer in 2008?

Against all odds, including floods, snow, sleet, testy employees and the darkness of oil (prices), which airline stock still managed to shine brightly against the setting sun of demand?

I am very happy to report that the airline stock that posted the highest return to shareholders in 2008 was one of our favorite airline stocks here at PlaneBusiness.

That stock was -- Allegiant Travel Company. The company is the parent of Allegiant Airlines.

The airline, which managed to continue to post profits in 2008 -- even though it was flying fuel-guzzling MD-80s, saw its shares climb a whopping 51% for the year, ending 2008 at 48.57 a share.

Not surprisingly, this year was one of the worst on record in terms of yearly gains and losses for the things with wings, collectively speaking.

Of all the airline and airline-related stocks we track, only four managed to post a gain for the year.

Those four were:

Allegiant 51%

Hawaiian Airlines 25%

JetBlue 20.3%

Alaska Air Group 17%

*Alaska and JetBlue are also two PlaneBusiness favorite stocks.

To see how your favorite (or not-so-favorite) airline stock performed in 2008, click here.

Posted by Holly at 6:51 PM | Permalink | Comments (0)