Tag Archives: airline stocks

PlaneBusiness Banter Now Posted!

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This week’s issue of PlaneBusiness Banter is now posted. We are all over the place this week as first, I tell you what you missed at The BeatLive Conference last week. The conference usually attracts an assortment of corporate travel heavyweights. This year was no exception.

Then of course we have to talk a bit about that certain airplane that was finally delivered to its new owners in Everett, WA on Monday. You know. The one that was just a tad late and, apparently, a tad overweight.

Yes, Boeing finally delivered its first 787 to All Nippon Airways (ANA) on Monday.

We also have lots of union labor news to talk about. How many American Airlines’ pilots are now expected to retire on Oct. 1? We hear the number could be almost four times as many who retired at the beginning of September.

American Airlines was also in the news last week as Moody’s lowered its outlook on the airline’s debt to “negative.” Tuesday, the airline announced an EETC debt refinancing deal. We let you know what JP Morgan analyst Mark Streeter thinks of the debt deal.

One thing’s for sure. The airline is certainly paying more than it did back in January for the deal. Yield on this one is in the 8% range. In January the airline did a financing deal at about 5.25%. That’s what rumors of bankruptcy, impending debt bills, and a continued inability to make a profit and throw off cash does.

Meanwhile, pilots from both Continental and United Airlines picketed on Wall Street Tuesday.

We update you on the status of the pilot negotiations at United, in addition we wonder why it is that pilots think Wall Street analysts really care if they picket outside the NYSE. And why it’s really a bad idea — both for United and for the industry as a whole.

Speaking of Wall Street, airline stocks did not have a good week last week. Neither did Wall Street. We give you our take on the latest economic tea leaf reads and tell you why this Thursday is a very important day for the eurozone — and US financial markets as well.

One good side effect of continued eurozone anxiety – both crude oil and jet fuel posted large declines for the week. That is very good news for airlines.

Lots of reader mail this week — from baseball to airlines to comments on our column from last week.

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

PlaneBusiness Banter Now Posted!

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Hello everyone. Just a short note this week to let you know that this week’s issue of PlaneBusiness Banter is now posted.

PBB is posted a bit earlier than usual this week, as yours truly is headed out to Las Vegas in a couple of hours, where I will attend The BeatLive Conference.

This will mark the fourth year I’ve attended this corporate travel get-together of industry heavyweights, and I look forward once again to getting my corporate travel gossip fix for the year.

Jay Campbell, the founder of The Beat, has challenged all attendees of the conference to join him in a SkyJump off the Stratosphere. (You freefall from 108 stories up.) Think I should do it? I’ll keep you posted.

This week we’re talking more about the great third quarter guidance we keep hearing from all the US airlines (although one major airline will still post a loss…guess who?) and of course we’re talking about Boeing’s 747-8 launch debacle involving Cargolux. What a mess that is.

In other news, we also break down the second quarter earnings news from Virgin America, which was released Friday by the airline. (As Virgin is not publicly traded, they report their numbers to the DOT and they are not released until much later than the rest of the sector.)

You know what they say about companies that issue press releases on Friday. That’s right. It’s usually an indication they’d prefer the information was somewhat ignored.

Looking at the numbers posted by Virgin, I can understand why.

How did they stack up compared to the recent second quarter results posted by the rest of the North American airline group? We’ll fill you in.

Meanwhile it sounds like the mothership of the Virgin empire, Virgin Atlantic is set to announce an alliance hook-up. If it’s not Star, I’ll be very, very, very, surprised.

We’ve got the latest on jet fuel, and more importantly we tell you how well the US airline sector fared on Wall Street last week — after all those bullish comments the various airline execs made at the Deutsche Bank Transportation Conference.

Oh, and Shoshana Hebshi? We talk about her experience flying on 9/11 as well. If you have not read her blog post in which she details what happened to her — including being strip-searched — after being taken off a Frontier Airlines flight in handcuffs on September 11, it’s a must read.

Fear. It’s not a good thing.

Meanwhile, in our column this week, I give props to the current crop of airline CEOs. You know why? They deserve it. I’ll tell you why it’s a good thing the industry now appears to be led by a group of adults rather than a bunch of flamboyant “characters.”

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

On that note, I don’t want to miss my flight to Vegas. Gotta go. Talk to you guys later!

PlaneBusiness Banter Now Posted!

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Hello everyone. We’re back from our August hiatus. Perfect timing too, as today airline execs took their turns talking to investors at the Deutsche Bank Aviation Conference. And what did most of them say? Demand has not slowed.

In addition, remember that the airlines were the beneficiary of that nice FAA tax collection snafu in August, which fattened their bank accounts with a little unexpected spending money. Tuesday a number of airlines gave more precise guidance as to just how much their bank balances were fattened, as a result of Congress being unable to act like adults.

All of this positive news caused the markets to reward the flailing airline sector with a huge turnaround today.

The depth and strength of airline exec comments today really did seem to be in direct opposition to how we, and everyone else on the planet, perceive the macro economic landscape. I was surprised at some of the PRASM estimates for September that were floated today. Much better than I had anticipated.

This week is also “catch-up” week as we update subscribers on what went down with the Southwest Airlines/AirTran pilot seniority list integration proposal in August. Essentially the AirTran ALPA MEC refused to send the proposal to the AirTran pilot rank and file for a vote.

As of now, both sides are supposedly “talking” but there is already a “drop-dead” date established with the negotiations. If nothing is resolved by that date — the matter will be arbitrated.

We also talk this week about the situation at American Airlines. The airline had 111 pilots opt for retirement on Sept. 1. This is an abnormally high number, (the average monthly total is 11) and it appears the airline may have a similar number, if not more, opt to retire the beginning of October.

We talk about whether this is an “insider sentiment” that indicates the pilot group believes a bankruptcy is around the corner — or if it is simply a reflection of the sharp downturn in the value of AMR shares over the last quarter. (There is a look-back period in terms of what date and stock price is used in calculating benefits.)

Of course, we talk about how the airline sector performed both last week and while we were on vacation. We also go over the July DOT Air Travel Consumer report.

Then there is the usual hodge podge of goodies including an update on Stelios and his latest attack on the EasyJet board of directors, Moody’s cut in Travelport’s debt rating, the update in the case between American and Sabre, the skinny on the person who bit the Alaska Airlines first officer, and much, much more.

Subscribers can access this week’s issue of PlaneBusiness Banter here.

Weeeee’re Baaaack

Figures. I return from vacation, start up the combines, drag out the harvesters, and look what happens to the blog. Actually the blog was screwball when I walked in here this morning. I’m not sure what the deal is, but it must be a Movable Type issue, as I have not been in here since 8.24.11. I am completely and totally not to blame.

Yep. That’s my story and I’m sticking with it.

We’re off to see if we can figure out what the problem is here. Actually what that really means is I am going to send an email to the one person I know who can tell me what is wrong, and hopefully fix it. Me, myself? No, I am not capable of figuring out such tedious nonsense.

In the meantime, I’m off to peruse the feedback from today’s Dahlman Rose Global Transport Conference in New York.

Talk to you later.

PlaneBusiness Banter Is Now Posted!

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Hello earthlings.

Another rough night of weather here in the DFW Metromess. But have no fear. This week’s issue of PBB is now posted and a great issue it is. This week we announce the 2011 PlaneBusiness Wild Turkey Award recipient. Drum roll please.

This year the award goes to Bill Ayer, Chairman and CEO of Alaska Air Group.

While PlaneBusiness Banter subscribers are all too aware of the excellent job Alaska is doing on the financial side of the house, very few people know that much about the airline’s Chairman and CEO. That’s because Bill Ayer wants it that way. He is not one to bask in the spotlight. He prefers his employees do that — in recognition of their work.

But this week Bill has best be prepared to bask in the spotlight, or at the very least he had best prepare for the delivery of a case of Wild Turkey Rare Breed, compliments of the man for whom this award is named. That’s right. Herbert D. Kelleher.

Better known in most circles simply as… Herb.

In addition to our Wild Turkey award column, we have a very active letters section this week in which our subscribers talk about everything from Steve Hazy’s business model at ILFC to the TWA pilots lawsuit against ALPA. Oh, and yes, my rant last week on airline marketing and branding, or in most cases, the lack thereof. I post a few of the comments I received this last week on that column, but there are still more coming in. We might have to revisit the topic.

There was some chatter this week concerning the United/Continental pilot negotiations, but as I report tonight, I don’t see any positive progress on this front. Later this week ALPA President Lee Moak will be meeting with a joint meeting of the MEC’s from both airline pilot groups. How I would love to be a fly on the wall of that session.

On the American Airlines labor front, some good news this week. It sounds like the negotiators for the TWU, which represents the mechanics, and the airline, had a productive mediated session last week, and they have scheduled another meeting for two weeks from now in Dallas.

American and the Allied Pilots Association, also appear to be finally making some headway in their unmediated discussions. Again, good news.

Shares of Air Canada led the airline sector to its first positive week in a long time last week, as shares shot up 15% after the strike against the airline by its customer service employee group came to an end.

Oh. Yeah. There is an air show in Paris this week.

We give you our four quick takes this week on some of the more interesting tidbits we’ve heard coming out of Paris, and next week we’ll wrap up with a full rundown of who announced what. And maybe even…why.

One thing that is certainly clear — Boeing has best get off its you-know-what and come up with either a replacement aircraft design or an upgrade to its existing 737 product. Airbus now has banked almost 600 orders for its A320neo. Ryanair announced this week it has signed a “design” agreement with Chinese aircraft manufacturer Comac, to help the company design a Boeing 737 replacement aircraft.

As I reported in PBB after the recent Southwest Airlines annual meeting press conference, I don’t think I’ve seen Southwest CEO Gary Kelly respond as tersely as he did that day in answer to the inevitable “any news from Boeing about a 737 replacement aircraft” question.

Earth to Boeing….come in.

Finally, a big thank you to Brett Snyder, aka CrankyFlier . Brett gave us a very nice shoutout this week in his blog about the rant I went on last week concerning the importance of brand, and how some airlines get it, but most do not.

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

PlaneBusiness Banter Now Posted!

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Hello everyone. It’s Tuesday night. That means two things. One — this week’s issue of PBB is now posted. Two — the Mavericks and the Heat are on television. Now. Consequently my summary comments about this week’s issue are going to be mercifully brief!

In this week’s issue we talk a great deal about lawsuits. Yes, that means we are talking about American Airlines and its escalating legal fight(s) involving Sabre, Travelport, and Orbitz.

Speaking of Orbitz, American Airlines got a rude awakening last week when a court informed the airline that it once again had to provide fare inventory to Orbitz. I somehow don’t think American Airlines expected this — especially considering the airline had just rolled out a new television advertising campaign in which the airline touted the fact that AA.com had American Airlines fares — and Orbitz did not.

BZZZZT. Surprise!

Another surprise last week? The mechanics at United Airlines turned thumbs down on their highly touted tentative agreement. When I say “highly touted,” both the Teamsters and the airline had publicly lauded the deal in March.

So much for that.

We talk about why the deal failed. And why we think the Teamsters probably shoulder a lot of the blame. We also check in with the ongoing pilot negotiations at United.

Airline stocks had another rough week last week, as both employment and housing numbers released last week were nothing short of grim.

Oil prices remained flat last week, as did jet fuel, but fears the U.S. economy could be slowing down took their toll on the sector.

In the good news department, the traffic reports from May that have rolled across the transom already have, for the most part, looked good. Looks like May was a good month overall — just as those wily airline executives had indicated at the recent Bank of America/Merrill Lynch Global Transportation Conference.

We have a lot of subscriber letters this week, and we also take a retro look back at the offer Donald Trump made for American Airlines in 1989.

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

PlaneBusiness Banter Now Posted!

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Hello everyone!

We are a bit late posting our blog post tonight. PlaneBusiness Banter has actually been posted for awhile. But it’s been a rather nasty night here at the Worldwide Headquarters. Had to go offline for a bit. Tornado warnings, tornado sirens, baseball sized hail, rain. Just a lovely evening.

That’s okay. It’s not Joplin and it’s not Tuscaloosa. Still very unsettling though.

Speaking of unsettling, we didn’t hear many unsettling comments spoken at the Bank of America/Merrill Lynch Global Transportation Conference last week. Airlines made their way to Boston where analyst Glenn Engel held court. This week I give you a summary of the high points from the Conference and talk a bit about why, even though airline execs continued to sing the praises of continued revenue strength, a number of analysts are convinced the airlines have hit the wall in terms of fare increases and passenger demand pushback.

I was over at Southwest Airlines last week, as the airline held their annual shareholder meeting. After the meeting Chairman, President and CEO Gary Kelly held a press conference. Our take? I think the airline is now fully aware of the challenge it faces with the AirTran merger. It’s time to get to work.

In other news, Delta Air Lines and US Airways announced a newly revised slot swap proposal late Monday. Our take on the revised deal? We still like it just as much as we did when the two airlines first proposed the deal almost two years ago.

But I doubt American Airlines likes the deal very much. If the Feds approve the deal, it will give Delta Air Lines a huge leg up on its New York expansion — as US Airways will hand over 132 slot pairs at LGA to the Atlanta-based airline. In return, US Airways will get $66.5 million in cash and 42 new slot pairs at Washington’s DCA. Oh, and rights to fly to Sao Paulo.

The deal will strengthen the network of both airlines. For very little money.

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

Subscribers can access this week’s issue here.

Okay. I’m going back to the closet.

PlaneBusiness Banter Now Posted!

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Good evening earthlings! This week’s last mega-earnings issue of PlaneBusiness Banter is now posted. This week we dig our way through the recent earnings results and calls from Pinnacle, SkyWest and Republic Holdings. Let me put it this way. This is not an easy time for regional airline operators. Three different stories, three losses.

In other news, we talk a lot this week about why it is I am concerned about the negotiations between the United Airlines and Continental Airlines pilots. This situation has gone on far too long. These negotiations should have been wrapped up in no more than 60 days.

But now negotiations have become centered around the big “S” word. Union squabbling, turf wars, and intra-union power struggles that all go back to ….seniority.

These two groups had a choice going into these negotiations: follow the blueprint set at Delta/Northwest or the blueprint set with America West/US Airways. Every day that passes — it appears both groups are following the wrong set of plans.

I tell subscribers this week why I believe these negotiations are now at the tipping point.

In other news, we talk this week about two analysts and their respective research reports. First, we talk about Avondale Partners analyst Bob McAdoo’s research note on AMR. It was, without a doubt, the most scathing review of the inability of management at the airline to do what it needs to do that I have read from any Wall Street analyst. As he points out — the airline continues to lose at least $1 billion in revenues as a result of bad decisions.

So — what are they going to do about it?

Gary Chase, analyst with Barclays, issued a nice preliminary review of what he thinks the Southwest/AirTran deal is going to mean to Southwest. Both short-term and longer-term. We’ve admired Chase’s take on Southwest for years — and his piece last week was no exception. Opportunity? Yes. But with risks.

We’ve got the March DOT Air Travel Consumer Report, we’ll go over how the airline sector did last week (I’ll give you a clue — jet fuel rose again) and we talk a bit about the upcoming IPO from Spirit Airlines, as well as the results issued Monday from Steve Hazy’s new Air Lease Corp.

And more!

Subscribers can access this week’s issue of PlaneBusiness Banter here.

PlaneBusiness Banter Now Posted!

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This week’s issue of PlaneBusiness Banter is now posted. This week’s issue is one of those “kitchen sink” issues. First we peer into the financial reports of the four largest airline pilot unions — ALPA, APA, SWAPA and USAPA — spurred by my wonderings about just how much the US Airways’ pilot union, USAPA, is paying out in legal fees. Boy, did I open a nice big Pandora’s box. Who says we only have to dissect the financial statements of the airlines?

Then there is American Airlines. No, the airline is apparently not in talks to do a deal with Mexicana, even though press reports south of the border indicated otherwise over the weekend.

Meanwhile, tomorrow is not only the day that American Airlines announces its first quarter loss. It is also protest day for American employees. Concurrent with the airline’s executive level bonus allocations, the Association of Professional Flight Attendants are going to be protesting — and I would bet there will be some other airline employees contributing to the effort.

On the corporate travel front, American filed suit against Travelport and Orbitz last week. They even dropped the “Sherman” antitrust bomb in their filing. Yep, American thinks there is some anti-trust issues here. Travelport and Orbitz, not surprisingly, think this is merely a play for leverage.

Speaking of earnings, we have a line-up of heavyweights on Thursday, followed by another heavy day next Tuesday. We get you up to date on analyst expectations and reporting dates.

If it is time for first quarter earnings, then Proxy Statements are also in the mix. Those are those horribly confusing and hard-to-figure out SEC filings that tell us just how much the top executives at the airlines took home in compensation during 2010.

Southwest Airlines filed their proxy statement last week, and, well, let’s just put it this way. Remember when the airline used to have the lowest top-tier compensation levels in the industry — and they made a big deal about the fact this was the case? And they were proud of the fact? It’s not the case anymore.

Oh, we talk about that, we talk about how airline stocks did last week, we talk about the TSA’s patdown of the six-year-old, we alert you to a museum collection of air sickness bags, and we talk about a lot 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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Good evening earthlings! This week’s issue of PlaneBusiness Banter is now posted.

This week I talk a lot about US Airways. For good reason. I attended the airline’s “Unplugged” Media Day last week. The airline used the occasion to announce it is upgrading its regional airline fleet with first class cabins. But that was not the only news to come out of Tempe. We’ll give you the low down.

That doesn’t mean we’re done talking about Southwest Airlines and its recent fuselage problem. Nor have the late night talk show hosts.

Last week Southwest Airlines CEO Gary Kelly and American Airlines CEO Gerard Arpey both sat down with Terry Maxon from the Dallas Morning News at the SABEW Conference in Dallas. Gary talked about the Southwest incident and Gerard talked about the recent bogus offer to buy the airline from that outfit in Florida. Yes, as we assumed, the SEC is looking into it.

Speaking of Dallas, the DOT reported its February Air Travel Consumer Report last week. As expected, it was not a good month for airlines based in Dallas. (February ….ice…snow…Superbowl on ice.)

Expedia and American Airlines kissed and made up this week. But this news leaves a lot of very ragged and messy things to clean up on the corporate travel terrain. We like TheBeat’s Jay Campbell’s take on the news. We’ll share his take with you.

While pilots for United and Continental Airlines keep working on a new contract, all is not apparently warm and fuzzy on the United Airlines pilot side of the house. Reports say that there was a recall vote originally scheduled for Monday’s UAL ALPA MEC meeting. The intended victim? The pilot’s current MEC Chairwoman, Captain Wendy Morse.

Meanwhile the flight attendants at American Airlines offered up a deal for the airline. An immediate 6% raise for its members — and the rest of the contract details would be tabled for 18 months. The airline said no.

Speaking of American — April 20 is just around the corner. That’s the day you can expect to see protests from airline employees over the airline’s latest PUP bonus distributions.

We talk also take a look this week at just how much additional revenue and/or capacity cuts the airlines would need to make — in order to cover the current price of fuel for the remainder of the year. That’s a sobering chart. Thanks to Dahlman Rose analyst Helane Becker for the analysis.

As always, all this, and more in this week’s issue.

Subscribers can access the issue here.