Category Archives: PlaneMakers

PlaneBusiness Banter Now Posted!

home-typewriter copy 1Hello earthlings. Long time no talk. My apologies. I attempted to upgrade our version of WordPress for the blog last week and ended up, apparently, eliminating the post announcing that last week’s issue had been posted.

Bad Holly. I was clearly out of practice.

Yes, well, that brings us to this week, our second back in the saddle since our usual three-week Holiday Hiatus.

This week we’re talking about 4Q14 earnings. Delta Air Lines rolled out of the gates today with their numbers. They were in-line. I didn’t hear anything on the airline’s call that was out of line. However, with the dramatic drop in the price of fuel, the airline is now on the wrong side of some pretty major fuel hedges.

Followers know what I think about fuel hedges. I think the practice should be discarded, or if used, used only minimally.

Note that United Airlines just shed some of their hedges. And of course American Airlines has no hedges. They sold them all off shortly after the merger was completed.

Southwest Airlines,  on the other hand, does continue to hedge.

This Thursday, United, Southwest, and Alaska will report 4Q14 numbers. Next week we get to hear from Hawaiian Airlines,  Allegiant, JetBlue and American Airlines.

It’s going to be, for the most part, a record breaking earnings season. For one reason — oil.

In other news, we take yet another look at the JCBA that the pilots at American are currently voting on. Last week we took a long look at how we go to where we are now. This week I give you my take after wading through a raft of domicile blasts, talking to pilots on both sides, and members of management at American.

In a rather surprising move, we also had a lot of emails this week from unhappy Southwest Airlines pilots. I mentioned the union negotiations at the airline rather briefly last week, but it was enough to generate a healthy response.

It looks like the question on the labor side for 2015 is: which is going to be the biggest story of the year — the IAM’s attempt to gain representation of the flight attendants at Delta Air Lines, or the ongoing labor situation at Southwest?

FYI, the IAM is putting on one hell of a representational effort at Delta. Take a look at the union’s IAM Delta website if you don’t believe me. I don’t believe I’ve seen a more professionally designed site for a representational effort by any union.

In other news we talk about Bombardier’s woes, the newly launched Airbus A321LR, the first commercial A350 WXB Qatar flight, and United’s about-to-be-announced deal for at least 10 Boeing 777-300ERs.

As for airline stocks, it was as rather slow week, not a lot to report on that front, other than the 26% plus decline in shares of Bombardier. 

We also have a great look this week at the most recent comments from three of Wall Street’s top airline analysts — their look at 4Q14 and their look out to 2015 and which stocks they like.

All of this, and much, much, more in this week’s issue of PlaneBusiness Banter. 

PlaneBusiness Banter Now Posted!

home-typewriter copy 1Hello earthlings. How was your week this week? It was a fairly comfortable one here in the Metromess weather-wise, although Verizon FIOS pushed me to the limits of my patience until late Wednesday, after a Verizon networking failure prevented me from accessing a lot of sites — including PlaneBusiness.com! 

I just love IT failures.

Anyway, enough of my chit-chat.

This week we have a good issue. First, we take an in-depth look at the earnings reported last week by Spirit Airlines. Short and sweet? The airline posted great numbers, and 2014 is looking mighty fine. Wall Street obviously agreed, as shares of the airline that everyone claims to hate, picked up a nice double-digit gain last week.

Republic Holdings reported earnings this week. We give you the basics from their earnings report, while next week we’ll do our usual in-depth dive into the earnings call.

With that, the U.S. airline industry earnings season will officially be over.

This week we talk a lot about three hot topics — the pilot situation here in the U.S., Delta’s announcement about its new frequent flyer program that is based on amount spent, not miles; and United Airlines’ guidance bombshell the airline dropped after the close of trading Thursday.

Needless to say, we’ll give you our take on all three.

In other news, we give you a sneak peek at the fabulous new ad campaign for American Airlines’ new transcon service. We like it. A lot. As a retro fan that believes a company’s heritage and how it got to where it is is incredibly valuable — from a marketing standpoint — I think the blend of old and new used in the campaign is brilliant. It almost, ALMOST, makes me not hate the tail so much.

It was a good week for airline stocks last week, but this week is not going to end on such a positive note. As we talk about in this week’s issue, it remains to be seen how much of United’s bigger-than-expected revenue drop in January was due solely to weather, or if the airline is still having revenue management issues. We’ll begin to put the pieces together as other airlines begin to give better guidance for the quarter in the next two weeks.

All of this, and more, in this week’s issue of PlaneBusiness Banter. 

 

PlaneBusiness Banter Now Posted!

home-typewriter copy 1Good morning earthlings! Yes, it’s a tad late here in the U.S. time zones this evening. So I’ve decided to say good morning to the really early risers on the East Coast. Then again for our friends in Europe, it’s just a normal Thursday. Go back to eating your  delicious hard rolls and those wonderful preserves.

This week’s edition of PlaneBusiness Banter is now posted. It’s a little bit of this and a little bit of that this week as we talk about everything from the new documentary that will air next month on the TWA 800 crash, to the latest Air Travel Consumer Report numbers from the DOT. (Hint: American Airlines and American Eagle had one lousy April.)

Representatives from US Airways and American, along with critics of the proposed merger, were all in Washington Wednesday, testifying before Congress as to why (or why not) the merger is a good idea.

One interesting tidbit from today — we’ve all been wondering when the Department of Justice might rule on the antitrust part of the pie. Today, sources told Bloomberg that the DOJ will not rule on the merger until AMR leaves bankruptcy.

That is now scheduled to happen sometime in August. Could be as early as August 15. Or there could be a couple of things that push the date back a bit.

So that is good information to know. According to one source Bloomberg talked to, because the DOJ has not said anything about the merger or possible slot divestitures yet should not be read as a negative. They simply are not going to get involved until the bankruptcy is finalized.

Cool. We can live with that.

In other news, British Airways is moving closer to taking Spanish LCC Vueling private. I think the  ownership stake in Vueling that IAG originally picked up with its Iberia acquisition could turn out to be the most valuable part of that deal. Iberia may well not exist in three years. Or if it does, it’s going to be a shadow of its former self.

FYI: Vueling saw the biggest increase in the number of passengers of any global airline between 2011-2012.

Delta Air Lines had two very positive pieces of fan mail go viral this week. The best kind of marketing and PR a company can hope for — well-crafted testimonial letters from happy customers.

Oh — yes. There is an Air Show this week A rather soggy one over in Paris.

Airbus is clearly leading the show there this year — in more ways than one. We update you on the largest orders that opened the show, and yes, the A350-900 took it first flight last Friday. Pretty airplane. It took its second flight this week.

Boeing announced the launch of its 787-10 on Tuesday — right after Airbus announced a mega-order of airplanes.

Yep, the “mine is bigger than yours” mentally is very much alive and well in Paris this week.

All that and more in this week’s issue of PlaneBusiness Banter. 

 

home-typewriter copy 1Whew. We made it. Between a new server migration and April Fools’ day, it’s been a jam-packed couple of days at the PlaneBusiness Worldwide Headquarters.

This week’s edition of PlaneBusiness Banter is now posted. Subscribers please note: If you have our log in page bookmarked, you will need to change that link. The new log in address is: http://www.planebusiness.com/banter/

This week we’re talking about the Doug and Tom Show. The U.S. Bankruptcy Court approved the merger between US Airways and American Airlines last week. Meanwhile, American Airlines’ Chairman and CEO Tom Horton ramped up the revisionist history stories at the Wings Club Luncheon last week  – now the merger was not only his idea, but he was only just “playing poker” last year when he continued to rebuff the advances of US Airways. 

Right Tom. Keep telling yourself that. But I have something to share with you: nobody believes you. And for good reason.

We also had a chance to spend some time with Ken Kaufman last week in New York. He is one half of the KaufmanFranco design team that has been given the task of creating new uniforms for more than 70,000 employees of the new American Airlines. I liked what I heard from Ken. Any project like this is a massive undertaking, but I think KaufmanFranco is on the right page in terms of how they want the employees to look and the image they need to project. Classy, but functional. Not trendy and non-versatile.

On the airline stock front, it was a blockbuster first quarter for the airline sector. We tell you who the big winners were. (And there were very few losers!)

Boeing. Oh Boeing. Where do we start? It looks like Airbus is going to snatch a nice A350-1000 order with IAG — as opposed to the new Boeing 777X aircraft. Or at least that’s what Jon Ostrower at the Wall Street Journal is reporting tonight.

Meanwhile the Boeing 787 saga continues. Nobody still knows what caused the two batteries to melt down, and the company has yet to fly the test flight in which they will deliberately try to obliterate the battery. But the company still says the aircraft will be flying commercially again “very soon”.

Meanwhile, more airlines are getting testy about cash compensation from Boeing as a result of the continued grounding of the 787. None of this “discounts on future purchases”. Patience can only go so far.

On the analyst front, this week we look at recent comments from Morgan Stanley analyst John Godyn concerning the industry as a whole, and United and Delta in particular. We also look at the updated American/US Airways merger profit and revenue forecasts issued by JP Morgan analysts Jamie Baker and Mark Streeter.

We had a ton of subscriber letters this week. Thank you, thank you. We also give you our take on what our favorite Airline April Fool efforts were Monday.

All this and much, much more in this week’s issue of PlaneBusiness Banter. 

Oh, and please pardon the dust and packing boxes here in PlaneBuzz. The new stuff from Restoration Hardware is still in the boxes. (Including that very cool but very overpriced aviator desk! Yeah. Right.)

Look for additional sprucing up as we get more up to speed on our WordPress skills!

PlaneBusiness Banter is Back!

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Hello everyone. It’s time once again to jump into the fray. Our Holiday Hiatus is over. Time to close out the story on 2011 and start the story of 2012.

The first issue of PlaneBusiness Banter for 2012 is now posted.

This week we talk a lot about airline stocks. We look at how they performed for the last week, the last month, the last quarter and the last year.

The good news? The sector posted a huge fourth quarter. Not so good news — yearly stock performance numbers were horrible. But hey, the quarterly numbers are much more important.

In addition, contrary to a number of wire service and financial news site headlined “end of year” airline stock stories that are floating about the Internet — we tell you which airline stock really posted the best return to investors in 2011.

And no, it’s not Alaska Air Group — as many stories say was the case.

We also update subscribers this week on the American Airlines bankruptcy. The airline is starting to announce route changes, and has announced some fleet news. But, as Deutsche Bank analyst Michael Linenberg reminded investors in a note last week, timing for the airline’s Section 1110 filing the end of this month means that we should hear a lot more from the airline in the next 2 1/2 weeks concerning which aircraft the airline wants to keep, which ones it wants to walk away from, and which ones it wants to renegotiate with lessors.

On the traffic front, December RASM estimates from those airlines that supply such things are coming in mixed. We tell you who has reported better than expected RASM performance, and who has disappointed.

Following up on traffic — a reminder. Airline earnings reports for the fourth quarter and year-end will begin to roll out in a little over a week.

Both JAL and Hong Kong Airlines are talking about potential IPOs in 2012, while Lufthansa was apparently just pulling Virgin Atlantic’s strings over bmi. The German airline finalized a deal with IAG, parent of British Airways for the airline, er, slots over the Christmas holiday. Not surprisingly Sir Richard says he is going to continue the fight to keep BA from getting its hands on bmi’s slots.

Unfortunately I don’t think his screams are going to matter to UK regulators.

On this side of the Atlantic, flight attendants for AirTran and Southwest announced a seniority agreement right before Christmas — good news for the airline.

Did Boeing meet its 2011 delivery goal? No.

How many more aircraft did Airbus deliver in 2011 than Boeing?

Are those “tiny” hairline cracks that have been found in the wing assembly of the A380s really a safety issue?

All of this, and a lot more in our first issue of the year.

If you aren’t yet a subscriber to PlaneBusiness Banter — why not? Find out how you can become one here.

Shocker: Larry Kellner to Leave Continental At End of Year

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Frankly, there is usually very little that shocks me about this industry. Surprises me, yes. Piques my curiosity, yes. But shocks me — no.

But I got caught out in left field on this one.

This afternoon Continental CEO Larry Kellner announced in a letter to employees, and in a press release, that he was leaving the company, effective the end of the year.

But wait, he’s just not leaving as CEO. He’s leaving his position as Chairman of the Board of the airline as well.

Gone.

Kellner is leaving the airline to head up a new private investment firm, Emerald Creek Group, LLC.

The airline announced that Jeff Smisek, President and COO of Continental, will succeed Larry as CEO and Chairman of the Board.

How about that?

Another good one bites the dust.

United Boeing 767 Gets Hosed

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Now I know the rest of the story.

This week one of our friendly airline geeks on a list I am on sent out some disturbing pictures in which it appeared someone at United AIrlines decided to take a pressure washer to one of the airline’s Boeing 767s — knocking out windows and generally making a huge expensive mess.

But that wasn’t a pressure washing. It was from fire hoses.

Kieran Daly wrote on his blog, Unusual Attitude this week that he was told that United took a Boeing 767-300, and gave it the full customer-facing treatment. New seats, interior fittings, and best of all,”Panasonic’s all-singing, all-dancing in-flight entertainment.” All of this was done at its Chicago maintenance base.

That’s when all hell broke loose.

If you would like to read the official MX write-up of the damage, you can access it at Kieran’s blog. It runs for pages and pages. And pages.

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Readers Write In on Continental Express Crash: Pilot Actions Could Have Been Warranted

Thanks for your feedback on the news concerning Southwest’s move into Boston. I’ll strip off names and summarize comments I’ve received via email later today.

But first — let’s talk about what has been going on of late concerning the NTSB and their investigation concerning the actions of the pilot in the crash of Pinnacle/Colgan/Continental Express Flight 3407 last week.

If you are like me, you probably did a double take when you read the the Wall Street Journal article yesterday in which the paper reported that “evidence suggests pilot error” as the likely cause of the crash. The New York Times then ran with a story that said that the “crew may have overreacted” after the auto pilot system pointed the plane’s nose down to generate speed. No sources were named in either paper’s reports.

While officially the NTSB has not publicly made such comments, the assumption would have to be made that someone on the inside of the investigation was feeding both news sources.

Enter a number of our pilot readers.

Here is a “Read Before Fly” announcement that was sent to Southwest Airlines’ pilots yesterday. Sound familiar?

Last night more than one pilot sent me a copy. And they weren’t all Southwest pilots. Apparently the notice was posted on the PPRUNE site, or at least that is what one American Airlines‘ pilot wrote me.

___________

Safety Alert 2009-01 – February 18, 2009

There is a potentially significant hazard concerning the ILS to runway 23 in BUF.

Information has been received indicating it is possible to obtain a significant nose pitch up, in some cases as much as 30 degrees, if the glide slope is allowed to capture before established on centerline. Pilots who are preparing to configure and land have the potential to experience abrupt pitch up, slow airspeed, and approach to stall if conditions present themselves in a certain manner.

This effect is the result of an earthen obstruction close enough to the ILS to affect the integrity of the glide slope signal. This has resulted in the issuance of an advisory given on ATIS which states that “the ILS Glide Slope for runway 23 is unusable beyond 5 degrees right of course.” When attempting to intercept the runway 23 ILS from right traffic, the ILS glide slope indication may read full deflection down. Just prior to intercept it may then move up in such as manner as to enable approach mode to capture in such a way as to result in a nose up pitch and loss of airspeed. Southwest Airlines has issued a notice reading: “Until further notice, when executing the KBUF ILS/LOC Runway 23, DO NOT select Approach Mode until established on the localizer inbound.”

This issue is being addressed on several levels in an attempt to address procedures, facilities, and communication regarding this matter. If you experience any issues related to this, please file an ASAP form and or call SWAPA Safety at SWAPA toll free 800-969-7972.

____________

Interesting, eh? Especially because if this is the case, then the pilot could have been doing exactly what he was supposed to have been doing. He was trying to save the aircraft, not stall it. My point in all of this is that no one involved with the NTSB investigation should be “leaking” information to news sources such as that which was obviously leaked for publication in both the New York Times and the Wall Street Journal Wednesday. Especially given this advisory that was just issued to Southwest Airlines’ pilots.

Delta Air Lines And Pilots Agree to Reinstate ASAP Program

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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.

Ned Walker Beefs Up the Communications At Delta Air Lines: Nabs Ed Stewart

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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.