Monthly Archives: October 2014

PlaneBusiness Banter Now Posted!

home-typewriter copy 1What is another word for….exhaustion? The latest edition of PlaneBusiness Banter, which I think probably runs at least 80 pages printed out — is now posted.

Yes, it is earnings time. That lovely time of year that rolls around every three months. This week we have in-depth looks at the recent earnings results from United Airlines, American Airlines, Alaska Air Group and Southwest Airlines. 

Short and sweet? No real big surprises, although Southwest and United spooked some investors with their less than expected PRASM guidance. But both airlines posted strong 3Q14 numbers.

As for American Airlines, the airline continues to post very strong margins and nice fat profits — while still very much in the early stages of its merger. Excellent job. Give these guys another year and who knows how much money they will be making.

Alaska Air Group? These guys just will not be stopped. Not by Virgin America. Not by Allegiant. And not, it appears,  by Delta Air Lines either.  Alaska posted an excellent quarter with nothing short of mind-blowing margins — while it continues to fight the increase in capacity in its home turf from Delta. 

Yes, in case you missed that movie a while back — we’re pretty certain the plotline went something like this. Delta says to Alaska, “Stop codesharing with American Airlines or we’ll huff and we’ll puff and we’ll blow your house down.”

Alaska responded, as best we can tell by essentially saying, “Bring it on.”

Fun to watch.

In addition to all the earnings fun this week, our curiosity was piqued by some comments that Scott Hamilton with the Leeham Group made this week. Those comments? Instead of buying new Boeing or Airbus widebodies, could Delta Air Lines maybe purchase some pre-owned Boeing 777-200ERs? Interesting thing to ponder. He might very well be right. That RFP is still hanging, and in Delta’s 3Q14 earnings call last week, CEO Richard Anderson discussed the RRP and talked about ownership costs, and this and that and ….the upshot is….. I wouldn’t be surprised to see Delta looking at some used widebodied aircraft. Certainly wouldn’t be the first time.

We presented at the Business Travel News “Travel Trends and Forecast” event last week in Chicago. My friends at United Airlines should be happy. Not only did I have two excellent flights on the airline last week, but there was a very palpable uptick in the positive feedback about the airline from the corporate travel manager group to whom I spoke. Much better than a year ago. The airline still needs to become more consistent in its operations  – but there is progress being made.

Fantastic week last week for the airline sector. We’ll update everyone on who did what.

All this, and lots and lots and lots more — in this week’s edition of PlaneBusiness Banter

PlaneBusiness Banter Now Posted!

home-typewriter copy 1This week’s edition of PlaneBusiness Banter is now posted.

Delta Air Lines kicked off the 3Q14 earnings season last week. The airline reported in-line earnings — beating analyst consensus by a couple of pennies.

Net income was $357 million or $0.42. Excluding items, net income rocketed to just over $1 billion, or $1.20. The analyst consensus forecast had been for EPS of $1.18, so the airline came in pretty much in line.

The airline disclosed no real surprises in its earnings call, but there were some fireworks when JP Morgan analyst Jamie Baker pushed CEO Richard Anderson on the subject of capacity.

If that wasn’t enough, one of the industry’s most energetic analysts, and the analyst who recently downgraded shares of Delta Air Lines, Hunter Keay with Wolfe Research, was not on the call. We’ll fill you in on why that was the case.

In other news, airline stocks rebounded last week from their Ebola sell-off madness, we get you updated on the craziness that is surrounding the tentative agreement vote for the American Airlines flight attendants, there was a recent change at the top at ExpressJet, and much, much more.

All in this week’s edition of PlaneBusiness Banter

 

 

PlaneBusiness Banter Now Posted!

home-typewriter copy 1This week’s edition of PlaneBusiness Banter is now posted.

This week we talk a lot about Ebola. Not hysterically. Rationally.

Unfortunately we seem to be the exception.

Last week, heightened fears over potential demand destruction in the airline industry, as a result of fears over the death of one person in Dallas sent shares of airline stocks plummeting like rocks. With the news that a nurse who attended to the man who died last week had tested positive for Ebola breaking over the weekend, things didn’t get much better for airlines Monday either.

Meanwhile, the U.S. is watching as the price of crude oil and the price of jet fuel continues to drop to multi-year lows, and airlines continue to report good guidance, generally speaking, for 3Q14 numbers. Both of these should be resulting in positive moves, not negative, for airline stocks.

But last week traders were trading on headlines. Not fundamentals.

Monday it was the same story.

In other news, we’ll tell you what we found interesting at this year’s The BeatLive Conference which was held last week in New Orleans. Yours truly presented the look at the airline industry for the corporate travel audience, while Kevin Krone, SVP of Marketing at Southwest Airlines, was on “The Hot Seat” this year. Kevin did a great job — and while he said that the airline is now about to announce an upsell produce anytime soon — it is going to announce some “onboard improvements” in the not-too-distant future.

No other hints were given.

We update you on the DOT Air Consumer Travel Numbers for August; we get you up to speed on the new approach A4A looks like it is going to take as it hits Congress up once again for a comprehensive FAA reauthorization funding bill, we give our thumbs up to the JetBlue decision to hire former Wall Street analyst Kevin Crissey as its new director of IR, we tell you what airline analyst took the First Team analyst spot in the 2014 Institutional Investor surveys, and oh, so much more.

All in this week’s edition of PlaneBusiness Banter. 

PlaneBusiness Banter Now Posted!

home-typewriter copy 1This week’s edition of PlaneBusiness Banter is now posted! Last week was a wild one in the airline industry between fears associated with the first case of Ebola diagnosed in the United States, weather, continued ATC issues in Chicago, end of quarter stock performance, and fireworks down in Dallas, where the Dallas City Council told Delta Air Lines it had two weeks to vacate Love Field.

Say what? 

We’ll get you updated on who has apparently done what to whom to get us to this point and what will probably come next.  (Hint….lawsuit.)

There were other legal wranglings last week including a suit that now will go back to a lower court involving some unhappy Spirit flyers; and American’s request to the DOT to transfer slots it awarded to Delta for its Haneda routes — to American. We’ll tell you why American thinks it should be allowed to  move the service to LAX, and fly a daily flight to Japan.

We update you on the latest concerning the flight attendant TA voting at American, and we also give you our take on why pilot negotiations seem to be falling behind the original 30-day timetable at American. Hint: We don’t disagree with what we hear are the reasons.

Southwest Airlines took the top stock performance honors for the third quarter. We tell you which airlines did well, and which ones did not — as we go down the results for the third quarter.

Speaking of, 3Q14 earnings are right around the corner. We give you the dates you’ll not want to miss. Essentially most of the big players (with the exception of Delta, which reports on Oct. 16) will report the following week. Oct. 22-23 are going to be very busy days.

El Al seems to have a problem on some of its flights — orthodox Jewish men who refuse to sit next to …gasp….women! Meanwhile, United Airlines announced it has hired its third CIO since the merger of United and Continental. Will the third hire be the charm?

The biggest news from last week — the continued decline in the price of oil and jet fuel.

The importance of this cannot be underestimated in terms of the industry and lower costs.

We’ll tell you more about why we think this is not a short term thing.

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