Monthly Archives: June 2014

PlaneBusiness Banter Now Posted!

home-typewriter copy 1Good evening everyone. This week’s issue of PlaneBusiness Banter is now posted.

This week we are talking about a lot of things. First out of the chute – Imperial Capital analyst Bob McAdoo’s dead-on research report last week on United Airlines. While Bob downgraded shares of United, the real story was his in-depth report on the airline, and what he feels are the achilles heels. One — Dulles. Two — the airline’s continued (and at this point rather seemingly obstinate) reliance on 50-seat regional jets.

Yes, the two do go together. Close Dulles and you can take a lot of that feed and move it over to Newark. But only if you upgauge — a process, I might add, that both Delta Air Lines, and US Airways (now American) have been doing for years.

Why hasn’t United already moved to upgauge operations? You answer that and you get the prize for the week.

In other news, we talk about Delta Air Lines’ CEO Richard Anderson and his comments in Washington re: the Ex-Im Bank. Only problem? We really don’t think Richard wants the bank to go away completely. He just doesn’t want them to finance wide-bodied aircraft for foreign airlines that are state-owned. But some right-wing Conservatives in Washington do want to do away with the bank completely.

Stay tuned.

The co-founder of Southwest Airlines, Rollin King, passed away last week in Dallas. He was 83. We had hoped, as had others, that Rollin would one day pen his take on the early days of Southwest. He never did. This only makes us that much more motivated to press ex-Chairman and CEO Herb Kelleher to do so.

This week our contributing editor Frank Arciuolo talks to us about the concept of the GDS, and what it is and what it isn’t. And what it had best morph into — otherwise the airlines are going to come up with a far better alternative.

The week was a fairly uneventful one on the Street, with about half the stocks we track posting a gain and about half posting a loss. WestJet led the gainers, while United took “Goat of the Week” honors.

All this, and much, more more, including the latest titillating gossip from both Boeing and Airbus, in this week’s edition of PlaneBusiness Banter. 

PlaneBusiness Banter Now Posted!

home-typewriter copy 1Good evening earthlings. This week’s “Summer Solstice” issue of PlaneBusiness Banter is now posted.

This week we talk a lot about American Airlines, as we attended the airline’s Leadership Conference in Dallas last week. You know I am a culture queen — one that believes strongly in the power of empowering employees through clear, consistent, and persistent communications from management.  Yes, well, the conference reinforced the management/employee relationship that we had seen at US Airways for years prior to the merger.  We weren’t surprised, but I think some American Airlines’ employees were. But by the end of the day, I think all of the 1500 or so folks in the room got it. And some walked away with a T-Shirt to prove it!

American was also out buying slots at Heathrow last week, it awarded the flying of 20 regional aircraft to Compass; and its passenger service agents received the “single carrier status” from the National Mediation Board. A representational election for the combined employee group will now be scheduled.

On Wall Street, airline stocks enjoyed a much better week than the week before — even though the price of jet fuel shot up. We talk a lot this week about what is going on in Iraq and how this could impact not only the price of jet fuel, but the economy as a whole. What price per barrel threshold do you think the U.S. economy can absorb before it is affected negatively?

We talk a lot about why we like the move from “miles based” frequent flyer mile programs to those based on “spend.” That’s the way it should be and we’ll tell you why it benefits both passenger and the airlines.

Delta Air Lines opened up its new museum to the public last week. Can’t wait to visit. The museum is the site of the first public fully-functioning flight simulator. (An old Boeing 737-200 to be exact!)

Oh, and yes, we also talk about that utterly confusing 8-K that United Airlines filed last Friday in which it talked about the termination of employment contracts with three top execs at the airline.

The wording of the filing was awful. People are antsy enough right now about possible changes at United. Add all of this to the fact the news of the filing was on a Friday, and it made for the perfect storm. I received over 100 emails from people concerned about it, wondering if indeed John Rainey, Jim Compton and Jeff Foland had been fired. No, they have not been fired. Their employment agreements were simply changed so that they would be in synch with other top execs at the company. 

Like I say, the wording was not the best. Even I was confused — and I read it about four or five times.

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

PlaneBusiness Banter Now Posted!

home-typewriter copy 1Good evening earthlings! It is yet another dark and….warm night here in the Metromess. The latest edition of PlaneBusinesss Banter is now posted.

This week we recap what was a very United Airlines-centric week last week. Not only did I fly on the airline’s trans-con p.s. product for the first time, but I also made my first flight on a Boeing 787 Dreamliner. Again, compliments of United. 

Oh, and I also attended the Tony Awards last Sunday night. Thanks to United. (That’s a whole ‘nother story!)

Finally, last Thursday, United Airlines’ SVP of Global Sales Dave Hilfman and I rocked the house at a joint Silicon Valley Business Travel Association/Bay Area Business Travel Association dinner meeting in San Francisco. I’m not sure who was the dog and who was the pony, but our yin/yang combination of sales hyperbole, financial analysis, and overall knowledge of the industry — peppered with a healthy dose of good humor and snarkiness — seemed to be well received. We’re thinking of taking our act on the road.

My thanks again to Ron Wagner, who extended the invite to the two of us to participate. It really was a heck of a lot of fun, the audience was large and asked a lot of questions, and I think everyone enjoyed themselves.

In other airline industry related news, it was a horrible week on Wall Street last week for the sector, after stocks were hit with two big jolts. One was Lufthansa’s profit warning for both this year and next. The second was the sharp rise in the price of crude oil — a result of political tensions surrounding the goings-on in Iraq.

Meanwhile, we also talk about the DOT April Air Travel Consumer Report, we get subscribers updated on the latest traffic and PRASM estimates from the usual suspects, and we also welcome a new contributing editor to PlaneBusiness Banter — Frank Arciuolo. This week Frank takes a look at the recent move by Delta to bring the development of its PSS system in-house, back from Travelport. 

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

PlaneBusiness Banter Is Now Posted!

home-typewriter copy 1Good evening everyone! It is, indeed, that time once again. This week’s issue of PlaneBusiness Banter is now posted!

This week we talk about a lot of things including the recent IATA AGM which was held in Doha, Qatar. We also talk about this week’s annual meeting of American Airlines, which, as has been the case for US Airways since the America West merger, has always been held in New York.

We also get into the nitty gritty as to why both employees of US Airways and American are grousing about changes to their travel benefits at the new American. 

In other news, it was a very strong week for airline stocks. In fact, the airline indexes easily outdistanced the rest of the market last week, even though both the S&P 500 and the DJIA both posted record highs during the week.

On the oil price front, OPEC will be meeting next week — but we see no reason to see the organization make any major changes to their current 30 million gallon-a-day target. Meanwhile crude oil supplies produced in North America continue to increase. (That is a good thing!)

We also talk a bit about JetBlue this week. Cowen and Co. analyst Helane Becker took a few institutional investors over to visit with the management team there last week. Two things struck us about her report on the meeting  – one, what was discussed and how far the airline may swing away from it previous business model and two — who was not at the meeting.

Looking at the big picture this week, we talk about some of the changes we’ve seen take place in the industry over the last 19 years that are good — and we tell you what the two biggest challenges are, we think, to the U.S. airline industry in the next few years.

Hint: Emirates, Qatar, Etihad. 

Hint number two: Spirit, Frontier, other potential ULCC models.

We will be traveling once again next week. First to New York. Then to San Francisco.

For those of you in the San Francisco area, I hope to see some of you at the combined meeting of the Bay Area Business Travel Association/Silicon Valley Business Travel Association this coming  Thursday, June 12.

I, along with United Airlines’ SVP of Global Marketing, Dave Hilfman, will be doing our best to entertain everyone in attendance. We look forward to seeing some of you there!

Meanwhile, I start my Summer Trans-Con Tour this week, as I fly United Airlines’ p.s. service from JFK to SFO.

Next up? American’s A321t product.

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