Tag Archives: airlines

PlaneBusiness Banter Now Posted!

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

In this week’s issue we give you our take on what we think Ryanair is up to with its announced deal for Aer Lingus, we talk about the recent North Texas visits of US Airways executives, and we share what we think is the Kodak Moment of the Week from the recent US Airways’ Annual Meeting in New York.

Meanwhile, the 1113 process continues in the American Airlines bankruptcy. We think we’ll hear about a deal between the airline and the pilots this week — and it’s now up in the air as to whether Judge Lane will rule on Friday or not. He could rule on all three contracts, although APA has now formally requested a stay. Or, he could delay his ruling if he believes there is a chance for one, if not two of the unions to come to terms.

No, we don’t think the APFA will come to terms. Their contract will be abrogated.

Remember — all of this is part of the bankruptcy process. The 1113 proceedings have to come to a conclusion before the bankruptcy process can move forward, i.e., a US Airways plan be formally presented to the UCC.

As our Kodak Moment of the Week clearly shows, union leadership at the airline still solidly supports a merger with US Airways.

In other news, Delta Air Lines held its annual meeting in New York last week as well and CEO Richard Anderson talked a bit more about the airline’s refinery project. We talk a bit about that. And yes, to answer some recent questions — we like the idea a lot.

Airline stocks had a sloppy week last week, with the exception of LAN and GOL. The merger between LAN and TAM is now expected to become official on Friday, after an unexpected hold-up involving TAM shareholders. As we explain, this is no big deal, and after Friday, the largest airline in the world, per market capitalization, LATAM, will be based in Latin America.

The DOT April Air Travel Consumer Report was issued last week. All and all, a pretty good month for the airlines — particularly in terms of on-time performance and lost bags. But there were some airlines that did not fare quite as well as the others — and we’ll let you know both the good and bad news from the report.

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

PlaneBusiness Banter Posted!

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Hello all.

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

This week we have a little bit of this and a little bit of that. First, we look at the latest effort by American Airlines to present its view of the world, i.e., its “truthiness” regarding its future prospects as a “Standalone” airline. Now the airline has resorted to asking business partners for what amounts to a reference letter.

Amazing what a company has to do when it can’t find one independent Wall Street analyst to say they endorse the plan you say is your best option coming out of bankruptcy.

Meanwhile on the other side of the world, oneworld partner Qantas just lost $1 billion in market capitalization as investors clearly are not happy with the fact the airline is now slated to post its first annual loss since the stock went public in 1995. The stock dropped to such low levels last week that the airline has been forced to hire an advisor to help keep potentially hostile takeover bids away. But I doubt that the hiring of such a firm will be of much use. Former CEO Geoff Dixon is supposedly heading up one such group.

Meanwhile, Emirates said this week it remains on track to enter into a “commercial” agreement with the airline — but not as an equity partner.

U.S. major airlines seem poised to begin slapping $25 fees on oversized carry-on bags. We like the move — and don’t think passenger rights groups should be upset over all this. All the airlines are doing is leveling the playing field and stopping the abuse of the carry-on rules as they exist now. So everybody — just chill. The fees that are being considered are for “oversized” bags. Not normal bags.

Airline stocks had a fairly good week last week — while the rest of the markets stumbled. Again — the more fuel prices decline the better it is for airlines.

At the IATA Conference in Beijing this week the IATA set out an ambitious goal — to bring peace to the fight between airlines and GDS companies. We’ll see how all this shakes out.

Meanwhile China and the EU stepped up their game of chicken over China’s unwillingness to participate in the EU’s carbon emissions scheme.

Singapore Airlines launched its low fare long-haul “Scoot” last week. Not a product I am jumping up and down to fly on — but it’s yet another attempt by a major Asian airline to tap into the low fare market.

All this and more, including a ton of reader mail, in this week’s PlaneBusiness Banter.

PlaneBusiness Banter Now Posted!

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Hello everyone. We just posted this week’s last 1Q mega-earnings issue of PlaneBusiness Banter.

In this week’s jam-packed issue, we have something for everyone. A little AMR, a little Delta, a little United, some more AMR, a little more United, and yes, even a little Republic.

Wrapped around all this are full earnings call reviews of AIr Canada, WestJet, and SkyWest. So yes, you get a lot of Air Canada, WestJet and SkyWest.

In case you haven’t heard, Delta Air Lines and its pilots announced yesterday that the two sides had come to terms on a tentative agreement — seven months in advance of the current contract amendable date.

Bravo.

While we have not seen a copy of the proposed TA yet, we understand that there is one very interesting part of the contract. That part is the one that addresses the flying of the Boeing 717.

Yep, you know where this is going.

In March I broke the story that Southwest Airlines and Delta Air Lines had come to terms on a deal that would see most, if not all the AirTran 717s go to Delta.

Southwest responded very defensively about the report, although the airline never denied it.

The situation is complicated because of the fact the AirTran 717 pilots who agreed to the contract/seniority agreement with the Southwest pilots and that airline agreed to a deal that saw them more or less given a “carve out” in terms of seniority — as long as Southwest flew the 717.

All I can say is that if there is a part of the Delta pilot contract that directly addresses the 717 flying as I hear is the case — this will be interesting to watch.

In other news, we also have this week’s edition of the AMR Bankruptcy Follies. We have a real mixed bag of news and commentary this week. As most of you know, both the Unsecured Creditors Committee and AMR released statements last Friday which, in essence, allowed that the UCC was going to look at any and every potential deal that might involve American in an effort to maximize creditor and bondholder’s potential return.

American wasn’t too enthusiastic about the decision of the UCC, but they really don’t have any control over the UCC.

We also talk this week about the March DOT Performance numbers. As we had expected, United Airlines took a big hit in terms of on-time performance, lost bags, and complaints. On the flip side, US Airways did very well in March.

Airline stocks also had a good week last week. Shares of United Airlines took top honors. We’ll tell you why.

We also review the recent earnings news from Singapore Airlines, which was surprisingly bad, and IAG, parent of British Airways and Iberia. LAN also reported this last week.

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

PlaneBusiness Banter Now Posted!

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Hello earthlings. I would say good morning, but I’m not ready to concede that fact yet.

This week’s issue of PlaneBusiness Banter is now posted. This week we’re talking about airlines that are bankrupt, airlines that want to merge with airlines that are bankrupt, airlines that are trying to figure out how to merge with their partners who used to be bankrupt, and then there is the airline that wants to buy a refinery and produce its own jet fuel.

Never a dull moment in this industry.

This week we take a break from our American Airlines’ Bankruptcy Follies as we give you instead a summary from a panel discussion we participated in on Monday. The subject? “The Future of American Airlines.”

PBB subscribers are pretty familiar with most of what was discussed, which is more than I think was the case for most of the folks assembled at the Neeley School of Business at Texas Christian University in Ft. Worth.

Stand alone? Go belly up? Enter into a merger with another airline? Stand on the sidelines while their last chance at a major airline merger is snatched out from under their nose?

Trust me — there are a lot of scenarios here.

Twelve months out, those of us who participated on the panel will be able to see if our suggested thesis for the business case study –“Missed Opportunities” is still the case. Or if the long-term trend changes.

In other news, we talked to the folks at United Airlines last week about their continued cutover hangover. There does seem to be progress being made — and we’ll talk about that. We also talked to them about why the cutover had to be done on March 3 — and not after the new SHARES GUI was completed in nine months. We also ask the question that we were pushed to ask by subscribers — namely — was the airline motivated to do the cutover because there were management incentive payments in play?

We got answers to most of our questions. By next week, hopefully we’ll have the rest.

Meanwhile, down in Houston, Southwest Airlines wants to start flying internationally out of Hobby Airport. Needless to say, United, which is in the middle of a $700 million international terminal upgrade at IAH is not too happy about this idea. But it sounds like Houston is very happy about the thought of increased service, more money, and more jobs.

Let the fight begin.

Airline stocks had a pretty benign week last week — with one glaring exception. That of course was Pinnacle. Shares of the airline sank 60% after the airline filed for Chapter 11 protection.

And of course, we preview first quarter results, as they are just around the quarter. Long and short — we will have more airlines lose money for the quarter than post a profit.

All this and much, much more 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 is Back!

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Hello everyone. It’s time once again to jump into the fray. Our Holiday Hiatus is over. Time to close out the story on 2011 and start the story of 2012.

The first issue of PlaneBusiness Banter for 2012 is now posted.

This week we talk a lot about airline stocks. We look at how they performed for the last week, the last month, the last quarter and the last year.

The good news? The sector posted a huge fourth quarter. Not so good news — yearly stock performance numbers were horrible. But hey, the quarterly numbers are much more important.

In addition, contrary to a number of wire service and financial news site headlined “end of year” airline stock stories that are floating about the Internet — we tell you which airline stock really posted the best return to investors in 2011.

And no, it’s not Alaska Air Group — as many stories say was the case.

We also update subscribers this week on the American Airlines bankruptcy. The airline is starting to announce route changes, and has announced some fleet news. But, as Deutsche Bank analyst Michael Linenberg reminded investors in a note last week, timing for the airline’s Section 1110 filing the end of this month means that we should hear a lot more from the airline in the next 2 1/2 weeks concerning which aircraft the airline wants to keep, which ones it wants to walk away from, and which ones it wants to renegotiate with lessors.

On the traffic front, December RASM estimates from those airlines that supply such things are coming in mixed. We tell you who has reported better than expected RASM performance, and who has disappointed.

Following up on traffic — a reminder. Airline earnings reports for the fourth quarter and year-end will begin to roll out in a little over a week.

Both JAL and Hong Kong Airlines are talking about potential IPOs in 2012, while Lufthansa was apparently just pulling Virgin Atlantic’s strings over bmi. The German airline finalized a deal with IAG, parent of British Airways for the airline, er, slots over the Christmas holiday. Not surprisingly Sir Richard says he is going to continue the fight to keep BA from getting its hands on bmi’s slots.

Unfortunately I don’t think his screams are going to matter to UK regulators.

On this side of the Atlantic, flight attendants for AirTran and Southwest announced a seniority agreement right before Christmas — good news for the airline.

Did Boeing meet its 2011 delivery goal? No.

How many more aircraft did Airbus deliver in 2011 than Boeing?

Are those “tiny” hairline cracks that have been found in the wing assembly of the A380s really a safety issue?

All of this, and a lot more in our first issue of the year.

If you aren’t yet a subscriber to PlaneBusiness Banter — why not? Find out how you can become one here.

PlaneBusiness Banter Now Posted!

home-typewriter copy 1.jpg Hello everyone! I hope all of you are not crazed today. It’s that time of year. It’s a good time. But it can also be very stressful. So try to concentrate, leave those cookies alone and get your work done so you can push all the papers aside later in the week and just breathe. And enjoy.

And eat chocolate.

This week’s two-for-one issue of PlaneBusiness Banter is now posted. I told subscribers last week that I was going to delay the publishing of our last issue for the year by a week — so that I could talk about my trip to New York last week.

But that was not the only reason to wait until this week to write.

Delta Air Lines took Manhattan last week. And Brooklyn. And Queens. And the Bronx. And Staten Island.

In addition to the airline’s new route announcements out of LaGuardia, the airline also held its investor conference in New York last week.

We let you know what the airline had to say.

Meanwhile, yours truly presented at the Business Travel News Group’s Corporate Travel Management 2012 Conference in New York last week along with Kevin Crissey, airline analyst for UBS.

It was a packed house and I’ll give you one piece of intel from our session. When surveyed, the group of top corporate buyers overwhelmingly said they see increased spending on air travel in 2012.

I also attended the BTN Travel Hall of Fame dinner later that evening. What a rollicking event that turned out to be, as some of the other inductees decided to turn it into a roast of former AMR Chairman and CEO Robert Crandall.

Meanwhile, while all of this was going on, airline stocks enjoyed a second week of strong gains. Big winners included JetBlue and US Airways.

But Pinnacle Airlines was not as lucky. The airline warned the week before last that it was attempting to restructure contracts with vendors, customers, and employee contracts.

The stock is now trading at about a buck.

It’s a jam-packed issue this week including our yearly column in which we divulge what airline CEOs are asking for from Santa, we look at the October DOT operational numbers, and much, much more.

Subscribers can access this week’s issue — the last issue for 2011– here!

PlaneBusiness Banter Now Posted!

home-typewriter copy 1.jpg Hello everyone. It’s that time again. PlaneBusiness Banter is now posted. This week we are talking airplanes, pilot contracts and we wrap up the third quarter earnings season with our in-depth look at the recent earnings calls from WestJet, Air Canada and Republic Holdings.

American Airlines had clearly wanted a contract with its pilots in place before the AMR board meetings began Wednesday of this week. Does not look like that is going to happen.

The lack of a contract continues to drag down shares of the airline. Tuesday shares slid 1%, closing at 1.92. Shares dropped 5% on Monday.

Looking at what the company has proposed, I think it’s going to be hard for the APA Board to sell the deal to its membership given the wide disparity between the numbers its members had proposed and numbers the airline has proposed.

We look at the 101 page position paper the pilots at United Airlines distributed last week regarding their concerns over training and integration procedures with the merged airline. Who knew the FAA inspector who was fined for his involvement with the Southwest Airlines fiasco a few years ago is the same FAA inspector involved in the FAA SOC [single operating certificate] process at United Airlines?

Of course we also wrap up the third quarter earnings season as we take our in-depth view at the recent earnings call from Republic Holdings, Air Canada, and WestJet.

Then there is the Dubai Airshow. We give you all the top news from the event that passed $55 billion in orders as of Tuesday.

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 edition of PlaneBusiness Banter is now posted.

This week we have yet more third quarter earnings to discuss, as we take in-depth looks at the results posted by Allegiant, SkyWest and Pinnacle.

Next week, we wrap up our third quarter earnings call coverage as we look at Republic Holdings, Air Canada and WestJet.

Speaking of WestJet, our moles tell us that we should expect to hear another “important” announcement along with the airline’s third quarter numbers this week. That would make sense. It would also explain why the airline is late in reporting their numbers for the quarter.

Speaking of Republic — did you see what happened to shares of Republic Tuesday? That’s right. Shares picked up a whopping 61% on the day on incredibly heavy volume. The airline reported better than expected numbers and also gave clear guidance on how it plans to divest itself of Frontier Airlines. Investors liked what they heard. Obviously.

Late Tuesday there was an update posted on the AMR negotiations website concerning the negotiations between American and its pilots. This follows a week in which all indications continue to point to news of a new tentative agreement between American Airlines and its pilots being announced in the not-too-distant future.

Meanwhile, pilots at Southwest Airlines and AirTran overwhelmingly okayed their proposed seniority agreement. No surprise there.

Internationally, Singapore Airlines, IAG Group and Emirates all reported sharp declines in earnings for the quarter last week — as higher fuel prices took their toll.

Meanwhile, does IAG have a deal to buy bmi from Lufthansa or not? Depends on who you are asking. If you are asking Willie Walsh, the answer is yes. But if you are asking Richard Branson, the answer is apparently no.

Question of the week — How many weeks does it take to train new Boeing 787 pilots? Answer: Five weeks.

No, that’s not a joke. That’s what ANA is doing. Five weeks?

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

PlaneBusiness Banter Now Posted!

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Hello everyone. This week in PlaneBusiness Banter we are talking earnings. And more earnings. And more earnings.

This week’s 150-plus page issue contains our earnings call reviews for American Airlines, Hawaiian Airlines, Alaska Air Group and Southwest Airlines.

To sum up? We now know American has no more unencumbered aircraft (all the furniture has now, officially, been burned), one analyst believes the company is pushing pilots to agree to an expanded domestic codesharing agreement so that American can enter into such an agreement with US Airways, and yet another analyst thinks the airline’s liquidity situation is inevitably going to lead to a bankruptcy filing — probably in 2012.

Meanwhile, American Eagle and its pilots came to terms on a new eight-year tentative agreement last week.

Southwest Airlines‘ earnings call was …long. The airline’s financial results are…confusing. They are going to be that way for probably another couple of quarters — until the merger with AirTran passes the year-over-year comp mark. Meanwhile the airline’s costs are higher than we’d like to see but revenues were good.

Many of you still appear to be confused as to whether the airline lost money or made money. We explain all of that, and we give you CFO Laura Wright’s dissertation on the airline’s hedge situation. In full.

Laura deserves a medal for that performance.

Alaska Air Group had another strong quarter. The airline now does appear to be that very rare breed. Quarter in, quarter out, the airline continues to produce exceptional margins while running a very well managed operation.

Pinch me. Is this company really operating an airline?

Hawaiian Airlines also had a very good third quarter. The airline has taken a number of risks over the last couple of years, in an attempt to diversify its flying mix. This quarter’s results prove the airline’s strategic plan is working.

A heads up for institutional investors — management members from both Alaska Air Group and Hawaiian Airlines will be in New York in November for investor days. I’d recommend you go and talk to the teams from both airlines.

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

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