Monthly Archives: November 2007

Don’t Let the Door Hit You On The Backside When You Leave

Stacks Of Money

Proving once again just how wacky Wall Street can be, almost at the same time we posted this week’s issue of PlaneBusiness Banter, the news came over the wires that the FL Group — the hedge fund that is, er, was AMR’s largest shareholder, and the one that has been making all the noise about how AMR needs to “maximize shareholder value” issued a release today — saying it had slashed its position in the airline from 9.1% to 1.1%.

The fund said in a statement this afternoon that while the divestiture of Eagle is a move in the right direction,  AMR’s “lack of clarity over timing, terms and valuation” of shedding Eagle “has done little to enhance value.”

First, I agree with what the FL Group said.

But secondly, I’m glad they have taken their monopoly money and gone elsewhere.

Ticker: (NYSE:AMR)

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Good Morning

Great crisp fall morning here at the Worldwide Headquarters. We’re in final edits with PBB — will let you know when this week’s issue is posted.

Meanwhile, since we haven’t had a Foto Friday in awhile, who can tell me what year this picture was taken?

Back in a bit.

P.S. Check out those uniforms. Now those are real airline pilots.

Strikingunitedpilots

Thanks Guys!

Ah, scratch that earlier help wanted banner.

I think we’ve already received enough notes of interest that we may have what we need.

I’m wrapped up in this week’s issue of PBB for now.

All of you folks behave while I’m gone. Talk to you later.

Web Wiz Needed for Small Tasks

Biplane Help Wanted

Okay, I have too much on the plate, and not enough heavy-duty utensils to cut it up with.

With a major shiftover to a totally new software footprint for PlaneBusiness Banter now on the horizon, and with additional web programming needed to get our “Mesa Mess” mini-site completed and posted, I am looking for some part-time web savvy help.

Pressing duties include Photoshop/HTML graphic creation and Movable Type template creation and revisions.

On the backside for PBB, it would be nice to have someone who has experience tweaking code in such programs as JOOMLA, and other open-source UNIX based software on call who can help us as we transition into an entirely new back-end home for our worldwide empire.

This can be more than one person — so if you are simply a graphics wiz and can manipulate MT templates — that would be fine. We can look to someone else for the larger site management tasks.

Please send a note to me, at admin “at” planebusiness.com and tell me a little bit about your experience and what particular projects you’ve been involved in. Also, please advise as to your compensation requirements in terms of project or pay/hour.

Thanks.

First Take on American/Eagle News

Americanairlineslogo

Mary Schlangenstein at Bloomberg has a pretty good wrap piece on the American Eagle news from today.

As I have shared with a number of you privately this afternoon, I tend to agree with Bob Mann’s comments in this piece. While this may make the “activist” shareholders happy — I’m not so sure that American Eagle is that great a prize, nor will it garner much of a high price.

In the piece, Bob says, “I’m betting this one flops, compared to expectations. Investors may not want a stable of 37-, 44-, 50-seat jets and older Saab aircraft.”

He added, “Investors will want to diversify away from American Airlines-only flying, while AMR will want an exclusive, or protection from competitors.”

Yep.

The regional sector is growth-constrained, Eagle’s aircraft are older, smaller, and more expensive to fly, there is the pilot issue (the contract here is going to be tied to the mainline negotiations to an extent it appears now) and let’s face it — the gung-ho environment that Continental spun ExpressJet into simply does not exist today. Nor is it going to exist in 2008.

So while Craig Hall, who is the airline’s fifth largest shareholder tells Mary, “This is a good first step. We certainly hope that they are still looking at spinning off the mileage program, as we believe the biggest opportunity is there,” and we can be sure that the FL Group, the largest AMR shareholder is happy with the news, remember that all they are looking for is a bump in the stock price. Meanwhile, AMR is looking for more cost stability.

But neither of those two necessarily go hand in hand with an overly generous price being paid for Eagle. Not in this environment. And not with the equipment Eagle is flying.

Ticker: (NYSE:AMR)

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Crude Falls; Wall Street and Airline Stocks Frolic

Wallstreetone-4

Good news for the things with wings today. Weekly inventory numbers issued by the Energy Department this morning showed the drop in crude inventories was lower than expected,  gasoline inventories increased more than expected, and the drop in distillates, which includes the all-important jet fuel, was minimal.

Refinery output was also up for the week.

Wrap all this up together with increasing economic indicators that continue to point to a slowing economy (which theoretically should bring a decline in demand) and voila! Oil prices were down 4% or $3.80 to $90.62 today.

The price of crude has now fallen 7.2% in the last two days.

This fact was not overlooked by airline sector investors today. While the Dow Jones Blue Chip average was up 331.01 points on the day, or 2.55%. the AMEX Airline Index was up a healthy 4% to 40.02.

Leading gainers today included Allegiant, which posted a sizzling 7% gain, closing today at 34.51. It was a day of the 7% gain, apparently as US Airways was also up 7% on the day, closing at 20.97. AMR, parent of American was also up 7%, closing at 21.98. And, yes, Delta Air Lines was also up 7% on the day, closing at 18.77.

Our two always-volatile Chinese airline stocks had another bounce-off-the-wall day as well, as ADRs of China Eastern Airlines were up 21%, closing at 100.89, while ADRs of China Southern were up 8%, closing at 65.20.

Shares of Pinnacle didn’t have a bad day, with shares here closing up 7% to 15.72, while shares of Republic were up 8%, closing at 20.27. Skywest? Up 5% to close at 25.65.

Even shares of Mesa, which have posted a horrible month, had a good day. Shares were up 9%, closing at 3.45.

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American Airlines Says Its Unloading Regional Subsidiary

American Airlines

Just out on the wires. AMR, parent of American Airlines says that it “plans to divest itself” of its wholly-owned regional partner, American Eagle.

Did we hear the magic words in the press release that we’ve heard oh-so-much these days in the airline industry. Yep. Sure did.

“The decision comes after a careful and deliberate evaluation of the strategy that will best enable us to continue to create value for our shareholders,” said AMR Chairman and CEO Gerard Arpey.

Ticker: (NYSE:AMR)

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PlaneBuzz Named One of the Most Influential Travel Blogs of 2007

Blue-Ribbon

Yours truly was named one of the “most influential travel bloggers for 2007″ this week by travel writer, passenger rights torchbearer, and syndicated columnist Christopher Elliott.

I’m sure many of you know Chris. He’s written about the travel and airline business for many years — and currently, as usual, he has a couple of gigs going on. He writes a syndicated column on airline travel problems geared at consumers, he has his own blog, elliott.org, and I believe he’s also writing for a number of publications on a freelance basis.

What I have always liked about Chris is that he has never allowed himself to fall in the “travel whore” category.

You know the type. The ones who want free tickets, free this, free that.

Then we, as readers, passengers, or viewers, are supposed to believe that whatever they write, or say on TV, is unbiased.

Chris doesn’t work that way.

In his comment about PlaneBuzz, Chris said, “Holly writes the airline blog. There is nothing more to say.”

Woo hoo.

Other lucky recipients of Elliott’s largesse included:

Mark Ashley, Upgrade: Travel Better

Paul Brady, Jaunted

Arthur Frommer, Frommers

Wendy Perrin, Perrin Post

Ben Popken, Consumerist

Rick Seaney, Rickseaney.com

I note that Rick’s latest post has to do with the fact that New Orleans’ Louis Armstrong International takes his nod as having had the longest security check-in lines of any major airport during the month of November.

MSY came in with a checkpoint time of 40 minutes. Newark was second with 35 minutes, and DFW came in third at 34 minutes. You can read more about his geeky TSA misery index here.

As for Mark over at Upgrade:Travel Better, he had a post of fake vomit on his blog the other day when he was tapped for the list. Nice going there Mark. His post dealt with the recent Tainted Turkey incident involving United Airlines and the less than tasty Thanksgiving dinner it served its employees.

Yum. Yum.

I would only add that I think Chris should have included Brett Snyder, aka Cranky Flier to his list. Not too late Chris. It could just become the “Top Eight.” Heck, the more the merrier.