Hello everyone. It’s that time. This week’s issue of PlaneBusiness Banter is now posted.
This week we have a 51-page analysis of the recent American Airlines earnings call. Read it. You’ll learn a lot about how to do a merger in this industry.
We also talk about the recent 4Q13 earnings numbers from JetBlue and Allegiant.
Short and sweet? While I love to fly on JetBlue, as an investment the airline leaves a lot to be desired. CAPEX and costs are both looking to put intense pressure on margins in 2014.
In addition, pilots at the airline, who just received a 20% pay raise, filed authorization cards Monday with the NMB for a representational election with ALPA. (But you’ll hear nothing about this in the earnings call!)
As for Allegiant, there’s no wonder that shares of the airline dropped sharply after the airline’s call. It was, as one analyst put it, “horrible.” We’ll give you the details.
Last week was not a particularly good one for the airline sector, as most stocks we track lost ground. But one stock picked up a double-digit gain. That stock was American Airlines, AAL. It was up 10% for the week.
United Airlines announced over the weekend that it was shutting down its Cleveland hub. While most of the mainline service will remain, all the regional flights will be eliminated. Not surprised. United only had to keep the hub in operation for two years after the merger before it could make the decision that it was not financially viable. I doubt the hub ever hit any of the pre-agreed upon financial goals.
This move, according to Imperial Capital analyst Bob McAdoo will not only be good for United, but for American and Delta as well. We explain why.
Some of us AvGeeks also had fun Thursday afternoon. Led by Leslie Scott at Delta Air Lines and John Walton at Route Happy, a group of aviation nutcases began a Twitter conversation that started out as an airline geek version of Upworthy or Buzz Feed headlines. Hashtag is #buzzfeedthesky. Hopefully we can keep this going. It was a lot of fun. Especially when we morphed into AvGeek pick up lines. Unfortunately I was in final edits for PBB, so I didn’t get to contribute that much this afternoon.
All of this and much, much more in this mega-earnings edition of PlaneBusiness Banter.