Tag Archives: airline earnings

PlaneBusiness Banter Now Posted!

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Hello everyone. It’s that time again. That’s right — it’s earnings time in PlaneBusiness Banter.

This week we roll out our “All-New” PlaneBusiness Earnings Review format, which I hope subscribers will find easier to dissect, peruse, and digest.

This week we take our in-depth look at the results reported last week by Delta Air Lines, US Airways, Southwest Airlines, and United Continental Holdings, parent of United Airlines.

Short and sweet? Delta Air Lines blew away the competition in 2012, but US Airways had a record breaking profitable year as well. It really is gratifying to see two major U.S. airlines turning out such great financial results.

United? The slog of its merger integration continues. 2012 was not a good year and it was really not a good quarter for the airline. However, we certainly detected a change in tone on the airline’s call this quarter — for the better — and we are looking forward to watching the airline as it tackles 2013.

While it seems the airline now knows what it has to do — now it has to do it.

Then there was Southwest Airlines. (We’ll talk about Alaska Air Group and its results in next week’s issue, along with Allegiant, Hawaiian and JetBlue.)

The results from Southwest were not overly impressive. In addition, analyst Jamie Baker with JP Morgan got into a rather interesting discussion with management at the airline concerning “brand.”

In a follow-up note to investors, Baker made the point that it seems the airline continues to make decisions based on brand, and not necessarily maximization of returns to investors and improved profitability.

It is an interesting concept, and we basically agree with him.

Of course we talk about about the American Airlines-US Airways merger process. Lots of things to talk about on that front this week, including our take on the rumors that Tom Horton, who is currently Chairman, President and CEO of AMR, might possibly stay on with the merged airline in some capacity — perhaps Chairman.

To say this story caused an avalanche of emails at the Worldwide Headquarters today would be an understatement.

Then there is Boeing — and that little problem of battery fires on its 787s. Boeing reported earnings today. We’ll catch you up on the latest with the company’s comments concerning the 787, and we update you on the latest progress in the hunt to find out just what the problem is.

All this, and much, much, more, including the Republic Holdings/AMR/Embraer deal, in this week’s issue of PlaneBusiness Banter.

PlaneBusiness Banter Now Posted!

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Good evening everyone. This week’s issue of PlaneBusiness Banter is now posted.  

We are almost done with fourth quarter 2011 earnings. This week we take an in-depth look at the results reported last week by Spirit Airlines and SkyWest Airlines.

I found both calls interesting last week — but for different reasons. Spirit notched the best operating margin of any North American airline for the fourth quarter. That was no small feat. It’s ROIC as nothing to sneeze at either.

As for SkyWest, the financial carnage associated with the airline’s ExpressJet deal continued during the fourth quarter, but there might, finally, be hope for 2012, although SkyWest will report a loss for the first quarter.

By the way, which aircraft that many operators seem to think is so desirable right now in the regional space does SkyWest’s CEO Jerry Atkin think may not be that important in the regional space five years from now? His answer may surprise some.

This week Republic Holdings and Pinnacle are slated to wrap up the sector’s fourth quarter results.

We also spend a lot of time this week parsing the latest bankruptcy filings for American Airlines. In particular, this week we take a look at the airline’s recent request to the bankruptcy court for $12 million dollars. Give or take. The airline wants the money so it can pay the Boston Consulting Group. (Just one of tens of consultants and advisors the airline says it has to have working for it.)

But the request for the BCG money is especially interesting to pick through.

Do you know what “The Cascade Project” is and what it supposedly is going to do for AMR and its management team?

We give you the scoop. We also tell you when BCG first started working with the airline.

I warn you though, if you have a weak stomach for corporate speak and consultant-eze, it may be hard to get down. And keep down.

We may have to force ourselves to parse the bankruptcy filings more carefully on a more regular basis.

Then again, maybe not.

As usual, all this, and much, much more in this week’s issue of PlaneBusiness Banter.


PlaneBusiness Banter Now Posted!

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Hello everyone. It’s that time once again. This week’s issue of PlaneBusiness Banter is now posted.

This week we take an in-depth look at the recent earnings reported by both WestJet and Air Canada. On the surface, WestJet easily bested its Canadian competitor in terms of its fourth quarter performance, but WestJet is now in the process of starting a new regional airline. We talk a lot this week about my concerns about this new “WestJet Express” operation.

Meanwhile, how is Air Canada going to increase its revenues? The airline’s problems in that department overshadowed the airline’s cost reduction performance in the fourth quarter. Meanwhile, cost forecasts for the first quarter are daunting.

We also update subscribers on the latest from the American Airlines bankruptcy, and we take a look at what happened to airline stocks last week. Hint: The frenzy of the last few weeks finally came to a screeching halt.

Pinnacle Airlines got some good news last week however — and that news sent its shares soaring. We’ll update you on all that news as well.

All this and much, much more, including a very active mailbag — this week in PlaneBusiness Banter.


PlaneBusiness Banter Now Posted!

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Hello everyone. It’s that time again. This week’s mega 100-plus page issue of PlaneBusiness Banter is now posted. This week we take an in-depth look at first quarter earnings and earnings calls from Delta Air Lines, US Airways, JetBlue and Hawaiian Holdings.

Best quote from the earnings calls this week came from Delta CEO Richard Anderson, as he tried to stress to analyst Dan McKenzie with Rodman and Renshaw that the airline is not interested, as are some competitors, in chasing market share. (Wonder who he was talking about?)

No, the airline is very serious about “keeping our capital commitments in check, generating free cash flow, putting that cash flow back on the balance sheet and keeping our capacity in line with what will produce an operating margin.”

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Richard’s follow-up comment: “This isn’t a hobby.”

Love it.

US Airways posted a good first quarter — even though the airline has no fuel hedges in place. That’s right. None. I love that as well. I think the airline is onto something, i.e., screw fuel hedging. If you run an airline as a well-managed business, you should be able to manage your expenses and revenue through capacity changes.

That goes back to the Delta mantra they kept emphasizing throughout its call as well. Essentially, if a route is not making money — it’s going to go away. Chasing market share is stupid. Managing for profits and margins is smart.

We also take an extended look at the recent results from both JetBlue and Hawaiian Holdings. Two very different airlines — two very different business plans. JetBlue continues to grow — and its dominant-carrier Boston presence speaks to that point. Hawaiian has decided to grow long-haul to the West, including new routes to Japan. How are the new routes faring? Hint: The airline will probably post a loss in the second quarter.

We talk about all of this, we muse about whether or not the death of Osama Bin Laden will eventually let us walk away from TSA Security Theatre, and well, of course we talk about Kate’s dress as well!

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

Subscribers can access this week’s issue here.

PlaneBusiness Banter Now Posted!

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Hello everyone.

This week’s 100-plus page issue of PlaneBusiness Banter is now posted. Subscribers can access it here.

This week we take a very detailed look at the earnings calls and earnings reports from US Airways, Alaska Air Group, United/Continental and JetBlue.

And yes, as far as we can tell, PBB is the only place, aside from the usual top end financial websites that charge $50-$75 a shot, that you can find earnings call transcripts for both Alaska AIr Group and United/Continental.

Not only that, but you get selected analyst comments on each airline and our take as well.

So what was our take on the results? I’ll give you just a taste. I think the Five-Year plan at Alaska Air Group has been a huge success as the airline posted an outstanding quarter and a great year. US Airways also posted an excellent quarter and year — and remember US Airways is the only major airline that does not hedge its fuel purchases. I think this is phenomenal. But when you listen to the airline’s President Scott Kirby explain the decision, and how expensive it is to hedge fuel these days, and you look at the money the airline made last year and last quarter, well — hey, I like it.

UAL/Continental had a good quarter, and guidance for January was outstanding. We expect continued revenue improvement here as the Continental folks begin to optimize the airline’s network and its aircraft. But as we all know, this is now the latest industry rehabilitation and improvement project. Just as we did with Delta and Northwest, it will be awhile before we know just how those “synergies” are going to shake out.

Then there was JetBlue. Yes, the airline did not have a great fourth quarter. But I don’t see this as a major indicator of any overriding problem. However, because so much of the airline’s business is based out of Boston and New York — the more snow and weather events that hit the East Coast in the first quarter — the more the airline will be tagged.

But we have lots more to talk about than U.S. airline earnings. We also talk about Singapore’s numbers which were released last week, as well as LAN Airlines‘ quarterly results.

Oh, and subscribers can also enter our “Retro Quote” Contest this week. Tell me what industry person said the quote and in what year they said it — and a geeky airline-related present will wing its way to you.

For those of you in the Chicago area, please be careful out there tonight and tomorrow. We are getting subscriber reports tonight that sound rather ominous.

For us in the DFW Metroplex, ice, sleet, and snow welcomed us this morning. Tonight? We’re headed to 7 degrees.

So much for all those swanky Superbowl events that have been scheduled for the outdoors. A number of the large “party tents” that various groups had put up to house events were brought down by ice and snow today, and I think the guys here for ESPN are going to go out and buy electric handwarmers, long johns and ear muffs before they go back outside to their glorifed “tent” environs in downtown Ft. Worth tomorrow.

Flight cancellations? Last check says that more than 8000 flights have now been canceled on Monday, Tuesday, and Wednesday across the U.S. But that number is going to go up tomorrow.

Yee haw. Where’s that damn groundhog?

PlaneBusiness Banter Now Posted!

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Good evening everyone.

This week’s issue of PlaneBusiness Banter is now posted. Subscribers can access this week’s 80-plus page issue here.

It’s that time of year. Yep. Earnings time.

This week we have our in-depth look at the earnings calls and our PlaneBusiness Earnings Summaries for Southwest Airlines, American Airlines, and Delta Air Lines.

If you are wondering why it was that airline stocks took a header last week — it was not because of higher oil prices. It was because Wall Street was not overly impressed by the earnings posted by Delta, or Southwest — much less American Airlines.

American, once again, is slated to be the only major airline which will not post a profit for the quarter — much less the year.

In the case of Delta, analysts were disappointed by the airline’s revenues, and by the fact the airline says, at least for now, that it intends to keep its existing plans for capacity growth intact.

Southwest Airlines also warned that revenue “head winds” are going to be tough in the first quarter and a profit for that airline for the first quarter is “iffy” if you look across the sector analysts’ current estimates. The airline also forecast a rather sharp increase in costs for the first quarter.

As for American, I don’t know where to start. As I tell my subscribers in more detail, I think the AMR earnings call was an embarrassment. Add that to the fact that the airline continues to lose money and we heard nothing whatsoever in the airline’s call in regards to a specific plan to turn the airline around and …..it’s pretty ugly.

Meanwhile, on the American/GDS War frontline, American and Sabre called a truce Monday. Not unexpected. I was surprised when Sabre threw its hissy fit and pulled American’s fares from its GDS. No way Sabre’s customers were going to let this situation remain in effect.

Truce is officially until June 1 — we’ll see something negotiated between the two before then.

American also announced a new deal with Priceline, which allows Priceline to use the airline’s new “Direct Connect” product. (And yes, this deal was announced before the truce with Sabre, which leads me to believe it was done to push Sabre back to the table — which is what happened.)

US Airways also announced a new deal with another OTA, Expedia, but that deal uses the more traditional GDS method of delivery. It will allow Expedia to market “seat choice” options and other goodies though.

Meanwhile, we did our own little test today of what showed up and at what price when I Iooked up fares between Dallas and LGA on both Expedia and Priceline. That was a fun experiment.

Our new “Retro” feature this week takes us back to 1994, and British Airways. And the billion dollars plus it invested in airlines such as USAir, TAT, and Deutsche BA. That strategy really didn’t work out too well for the airline, did it?

But enough of all this fun and frivolity. This week the emphasis is on earnings. Next week, we’ll be taking a gimlet-eyed view of United/Continental, US Airways, Alaska, and JetBlue -- all of whom report this week.

Speaking of Alaska Airlines — did they not blow the doors off in the fourth quarter or what? I remain tremendously impressed with the airline. I like the decision to de-brand Horizon as well.

But that’s for next week.

Meanwhile, all the rest — and more! — in this week’s issue of PlaneBusiness Banter.

PlaneBusiness Banter Now Posted!

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Hello everyone.

This week’s issue of PlaneBusiness Banter is now posted. Subscribers can access it here.

This week we have a pretty good issue. Always takes us a week to get back in the groove after the holidays, and this week I think we have a little bit of something for everybody.

No question that the thrill of new metal hung over the industry last week as Delta Air Lines told its employees it is looking at new aircraft options. While Continental/United did not tell its employees that it too has been checking its bank balances and kicking some tires, industry sources confirm that yes, this is also the case.

Then there was that obscene order placed by IndiGo Airlines — based in India. It was, according to Airbus, the largest commercial aircraft order ever place. A whole slew of A320s, including a nice stable of the new “neo” flavor A320. You know, the ones with the more efficient engine.

But Airbus didn’t stop there. Oh no, they are clearly in their “Let’s Hammer The Boys at Boeing” mode as they also announced a new A320 order from Virgin America. One that also, conveniently, was signed at the stroke of midnight on Dec. 29. (I’m making up the part about the stroke of midnight, but I’m probably not that far off.)

The result of all this? Airbus looks to now have a nice solid start to its “neo” program, and oh yes, the Virgin order pushed Airbus past Boeing in the all-important testosterone-fueled exercise called, “Who sold more airplanes in “________.” Fill in the year.

For 2010, it looks like Airbus nosed out Boeing, 644 to 625.

Not surprisingly, given all this hoopla about new metal, Steve Hazy’s Air Lease Corp. filed its S-1 with the SEC last week. Translation: They are going to do an IPO.

Of course the American Airlines/GDS cat fight continued last week, with one very interesting new tidbit. In last week’s PlaneBusiness Banter I talked with subscribers about how I wondered if there was not more going on between American and ITA than met the eye.

Well, looks like I was right, as American announced a new deal with ITA (American is already a client) for a nice chunk of work with American’s new IT overhaul — which is being spearheaded by HP.

We update subscribers on all the latest GDS related news, and we also share a guest column this week from Montie Brewer, ex-Air Canada CEO. He gives us his take on the GDS/airline situation. (Yeah, I know. Bet you can’t guess which side of the fence he’s on.)

We also have a longish Market Review this week. We bring subscribers up to speed with the latest research reports from three analysts — Jamie Baker and Mark Streeter with JP Morgan; Glenn Engel with Bank of America and Dan McKenzie with Hudson Securities.

All three have different takes — and different things to say — and in the case of Glenn, he gives us part three of his ongoing research series in which he compares airlines on the basis of revenue and cost per plane. None of the usual RASM, CASM stuff. His first two reports last year covered revenues of the major and regional carriers. This latest report covers the costs of the major carriers.

Interesting way to look at the same numbers.

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

PlaneBusiness Banter Now Posted!

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Hello all.

Here’s hoping that all of you had a wonderful Turkey Week. I did. Although I didn’t end up with enough left-over turkey. I may have to roast another one here shortly, just so I can have leftovers to make turkey hash with.

This post-Turkey Week issue we talk about a lot of things. First, our column this week looks at Orbitz and how it got to where it is today — and why American Airlines is trying to pull its inventory from its website. I take a look at the history of the company — and how it has evolved from its humble beginnings. Ahem. You all remember those beginnings. The company was set up as the “Travelocity Terminator” — the first attempt to set up a “direct connect” OTA for the airlines that created it.

My how things change.

Of course we talk about the as-yet-to-be-announced delay for the Boeing 787, the update from Qantas on its A380 operations, and yes, we even talk about how Air France is going to once again undertake recovery operations to find the black boxes and anything else it can find from its lost Airbus in the Atlantic Ocean this coming spring.

Union talk? Of course. We follow up our issue last week with a great letter to the editor from one of our subscribers in which he touches on both the Continental/united scope “problem” and the flight attendant situation at American Airlines. In a very astute manner I might add.

Airline stocks? This week we talk about the latest from Morgan Stanley analyst Bill Greene. Mr. Greene happens to believe that there is opportunity in them there shares. Airline shares that is. Right now.

Virgin America lands in Dallas this week. Yee haw! In anticipation of Virgin’s arrival, American is offering their customers the usual heavy dose of frequent flier points on DFW flights to LA and SFO, but as I talk about this week — is this tired and true tactic still relevant?

I’m not sure. At least not in this case. The Virgin product is a nice one. And there are a whole lot of folks for whom accumulating more AAdvantage miles is not nearly as important as a nice comfy seat, cool onboard entertainment and food options, and well….that whole Virgin Vibe thing.

Oh, we talk about a lot more this week — but I need to get this posted.

Subscribers can access this week’s issue here! Now!

PlaneBusiness Banter Now Posted!

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Greetings to all you turkey lovers out there.

It’s Monday. It’s time for this week’s issue of PlaneBusiness Banter.

Speaking of turkeys, yes, we’re talking about the TSA this week. Isn’t everyone?

But we’re also talking about Deutsche Bank analyst Mike Linenberg’s rather gushing research note on Republic Holdings. Also — where does Mike think the industry now has too many competitors?

We’re talking union stuff too. Two more thumbs down employee votes at Delta Air Lines, a thumbs up from the Southwest Airlines’ flight attendants on their contract ratification and a thumbs up ratification from the AirTran pilots on their new contract.

However — there is one part of the new AirTran pilot contract that we are curious about. Can you guess what part that is?

Then there is the picketing this week by the Continental and United pilots. Pahleez. Is this really necessary?

Not sure if you have been keeping up with the fight north of the border, but Canada and the UAE are about to go to blows over the issue of giving Emirates more access into Canada. I mean, this is getting serious.

We have a lot more information this week regarding exactly what happened when that Qantas A380 had an engine suffer an uncontained failure. The laundry list of items that were affected on the aircraft is not pretty.

Meanwhile, as has been the case since the beginning, most of the information coming out concerning the problems with the Rolls-Royce Trent 900 engine is not coming from Rolls-Royce.

Then we had Boeing running around, telling websites they had to remove photos of the damage to its 787 test aircraft. Lovely. I do so love it when a company thinks they can make a problem go away by removing the evidence in a rather heavy-handed manner.

On the GDS front, American Airlines seems more determined than ever to cause mayhem and madness in the travel agency business. More on their latest moves in this week’s issue as well.

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

Subscribers can access this week’s issue here.

PlaneBusiness Banter Now Posted!

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Okay all you hungry people. This week’s issue of PlaneBusiness Banter is now posted.

Whew.

This is the last earnings issue for the quarter, and that is a good thing.

Next week we can get back to our normal format and usual publishing schedule. Right before we embark on our Turkey day extravaganza.

But — before then — this week we have our hand’s full.

First, we have an update on the Rolls-Royce Trent 900 engine failure involving the Qantas A380. All the Qantas A380s remain grounded. Rolls still isn’t saying a lot. But everyone else sure is. Engines are apparently being taken off the A380 production line, Singapore Airlines has swapped out three engines already, and, well, this is a very serious situation.

It is going to make for a very serious dent in Rolls-Royce’s net profits as well, as you can bet all these airlines are keeping tabs on their expenses incurred and Rolls is going to receive the final bill.

Not to be left out, Boeing had its own problem last week with one of its 787s — as it was forced to land after a fire broke out in an aft electrical panel.

When we’re not talking aircraft and engines, we’re talking TSA.

As someone who is now faced with the prospect of having to go through an “extended pat down” every time I fly as a result of having a big piece of titanium in my hip, I am not happy about the new “group and grab” procedures.

Funny thing though — we received a number of notes this week from airline crew members. It appears that the TSA has pulled back on insisting on either the AIT scanner or the “extended pat down” for crew members. Not in all locations though.

No, the TSA has not issued an official backdown. But I’ve received enough notes to tell me that there has been a relaxation in the previous directives.

We also wrap up third quarter earnings coverage this week with our own “extended” look at Republic and Pinnacle.

If you took a look at the stocks of either airline and how they performed for the last week — you might have some questions.

In the case of Pinnacle, shares soared.

In the case of Republic, they did just the opposite.

We’ll tell you why.

We also go over the September DOT Airline Consumer Travel Report. And the September tarmac and cancellation numbers. Very interesting “rounding” of numbers going on here. We talk about all that as well.

There was a rather bizarre Airbus A380 order announced last week, the DOT and FAA sought to assure air travelers that they are working to make sure older aircraft are safe — only problem is that the efforts won’t take effect for years — and hey, the future King of England’s wife-to-be has two parents who met while working for British Airways.

We only talk about the important things here at PlaneBusiness Banter.

Subscribers can access this week’s issue here.