Tag Archives: Alaska Air Group earnings

PlaneBusiness Banter Now Posted!

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Good evening everyone! This week’s huge mega-earnings issue of PlaneBusiness Banter is now posted. This week we take an in-depth look at the recent earnings results and the earnings calls from Delta Air Lines, US Airways, Alaska Air Group, JetBlue, and United Continental Holdings.

But there’s more.

Republic Holdings announced last week that Frontier Airlines was getting a new executive team and — that the airline was going to become an ULCC.

You know what that is don’t you?

Ultra low cost carrier. Think Spirit. Or Ryanair.

Not sure what all the animals are going to think about this. Not quite sure what we think about it yet — as details are slim. But it appears that either Frontier will be rebranded and operated as a ULCC. Or it looks like it will be rebranded and then sold as a ULCC.

Heading up the new operation is none other than Dave Siegel. Yes, the same Dave Siegel who headed up the old US Airways during the Dark Period. Joining him is the former head of planning and pricing at Allegiant — Robert Ashcroft as SVP Finance. Daniel Shurz, meanwhile, was promoted to SVP Commercial.

Tomorrow employees and union leaders will finally hear from American Airlines — as the airline is slated to roll out its proposed labor contract modifications per section 1113 of the U.S. bankruptcy code. Meanwhile we’ll be interested to more hear details of the airline’s proposed restructuring plan.

It’s going to be one difficult day for American employees.

Meanwhile the head of the Pension Benefit Guaranty Benefit Corp., the government agency that would be forced to take over the administration of employee pensions if the airline walks away from them continued his very public criticism of the airline Tuesday.

The PBGC also placed liens against assets of American on Tuesday. The agency said that it filed over 70 liens for a total of $91.7 million, on behalf of the four pension plans the airline currently has. This comes after American only paid $6.5 million of the roughly $100 million that was due earlier in the month. The airline said that it had to conserve its cash.

We’ll find out more tomorrow on where the pension issue is headed. But one thing’s for sure — this PBGC is not the same as the one United Airlines rolled over when it went through its bankruptcy. Josh Gotbaum, the director of the PBGC, is not going to go down without a fight.

But the big story this week in PlaneBusiness Banter is earnings — lots and lots and lots of earnings. This week’s issue clocks in at over 150 pages as we take an in-depth look at the five airlines that reported in last week. Which airline do we think reported the strongest earnings for the fourth quarter? Delta Air Lines. And I tell subscribers why.

Also, those reports last Friday about how Delta was now possibly looking at a deal for US Airways? We give you our take on those reports and why they shouldn’t surprise anyone. Who is going to do what to whom and why? We’ll break down a number of the possible scenarios.

All this and a whole lot more. Now. In this week’s PlaneBusiness Banter.

PlaneBusiness Banter Now Posted!

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Hello everyone. I feel like I need to crank up the theme song from “Rocky” tonight. Yes, it’s earnings week here at the Worldwide Headquarters of PlaneBusiness Banter. Or rather, the first of three heavy earnings weeks. Or is it four? Oh, they are so much fun — who’s counting?

This week Alaska, United Continental, AMR and US Airways in-depth earnings reviews are on tap for PBB readers. I know it’s hard to believe, given how long some of our earnings reviews have run in the past, but I do believe we may have posted our longest earnings review ever tonight. Alaska’s call attracted a lot of analyst attention and they all asked a lot of great questions.

That’s what happens when you are an airline and you post a fantastic pretax margin, operating margin, and an even more impressive ROIC. (That’s return on invested capital for those of you who are not financial geeks.)

Funny. I can remember quarters in the past when Alaska executives would give their presentations on the airline’s earnings call and there were hardly any analysts on the calls asking questions. I used to feel sorry for them.

Things change when you begin running one of the most profitable and well-run airlines in the U.S.

American Airlines? Oh. Earnings. Did the airline report earnings last week? Kind of hard to remember what with all the hoopla the airline generated about its split Airbus/Boeing order of an entire fleet of aircraft. Actually I’m sure the airline would prefer that nobody remembered that they also reported 2Q earnings. And we’ll talk about why that is the case.

No question American would much rather we talk about nice new shiny airplanes.

One thing’s for sure. Wall Street was not happy with the news about all the nice new shiny airplanes. We give readers a selection of analyst comments to pour over this week — and the gist of the feedback goes something like this: new airplanes do nothing to change the underlying problems with the current business model or the brand. Or the operational issues. Or the cost issues. Or the continued less-than-industry peer revenue performance.

Much less mounting cash flow issues.

Bu they, don’t worry, be happy. I sometimes think that AMR management is convinced the airline is simply “too big to fail.” That’s a somewhat dangerous assumption to make. Just ask Lehman Brothers.

United Continental is, of course, still in its transition mode, but so far so good. The airline’s revenue performance was good in 2Q, but I suspect we are going to see the airline’s revenue performance get even better over the next 12 months. My biggest concern with United Continental remains its continuing labor negotiations. Particularly the ones involving the airline’s two pilot groups.

Then there is US Airways. Even without fuel hedges, the airline still posted a profit for the quarter. All things considered, that’s not a bad thing. However, US Airways also happens to have a rather dysfunctional pilot union that still can’t negotiate a seniority agreement, much less a contract. Last week that same union decided to go public with its “safety” concerns at the airline. Uh-huh. Everything new is old again, isn’t it?

We also talk about other things this week of course. But I won’t spill the beans. That will just have to be a surprise.

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