Tag Archives: British Airways

PlaneBusiness Banter Now Posted!

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

You know the drill. We lead off again this week with coverage of American Airlines.

This week we talk about how the airline now believes its seat problem is a result of passengers throwing gunk in between them. You buyin’ this? No, we aren’t either.

Monday also saw American CEO Tom Horton hobnobbing with IAG Chairman Willie Walsh in New York, as Qatar was officially announced as the latest member of the oneworld alliance. Actually the fact that Walsh managed to sweet-talk Qatar into the fold was the real story here.

But needless to say, American was quick to use the opportunity to do some positive spin of its own as the airline conveniently released its September traffic and PRASM estimates the same day.

Meanwhile, just hours before, Etihad’s marketing agreement (with more to come) with Air France/KLM was announced.

I said it when Qantas announced its deal with Emirates — the alliance system is dead. We’re going to see some big changes on this front going forward.

Airline stocks had a great week last week — with shares of US Airways and Delta leading the pack.

All of this and much, much more in this week’s edition 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!

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Hello earthlings. This week’s issue of PlaneBusiness Banter is now posted. In this week’s issue we take a follow-up look at the problem known as AMR. After our look at the airline’s Monday Meltdown last week, this week we give you more insight from an assortment of Wall Street analysts. The upshot? Bankruptcy is not going to save the airline, but at the same time, the airline does not appear to be anywhere near a filing.

The airline also announced cuts in capacity for the late fall and winter months. This news was probably the best news American Airlines could have uttered. Analysts liked the reductions. The airline says they are not a result of falling demand — but of higher fuel prices. Not certain, but the airline’s continued exodus of top-tier pilots just might have something to do with the airline pulling back on the reins as well.

Other airline stocks suffered as a result of AMR’s drop last week. US airline stocks were clearly the laggards in a week that saw the the rest of the markets do fairly well.

NextGen. FAA. Congress. Department of Transportation Inspector General.

Send chills up your spine yet? It should.

Last week the FAA and its project management of the NextGen project got raked over the coals by the DOT IG. But as we talk about this week in PBB, how can the FAA be expected to manage such a complex project when it can’t even count on having money to pay for paper clips from day to day — a result of how the agency is funded (or is not funded) by Congress?

Meanwhile, the European Court of Justice gave the EU a huge thumbs up last week on its plan to charge airlines around the world for their greenhouse gas emissions. Needless to say the airline industry is not happy about this.

Southwest Airlines’ CEO Gary Kelly talked to Bloomberg last week and he started throwing around some huge revenue numbers that he says the airline can produce — as a result of its AirTran acquisition. Only one problem. I’ve been talking to a number of industry people who don’t think he can.

What do you think?

Which reminds me. This week you, our subscribers, get a chance to tell me what the next airline merger will be. That’s right. Sharpen up those pencils and send me your two cents on just which merger could be next on our radar. And why.

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. 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.

This Week in PlaneBusiness Banter

You want to know how much money the airline industry had to shell out in additional GDS fees in 2009 as a result of the OTAs dropping their online booking fees?

We know the answer. At least we know how much Forrester Research estimates the airlines lost.

This week in PlaneBusiness Banter I sit down with Henry Harteveldt, VP and Principal Analyst with Forrester Research. We not only talk about the airlines and their additional GDS costs, we talk about onboard Wi-Fi and why AirCell’s pricing is too expensive, American’s lousy business class seats, Braniff, the shift that Forrester sees happening from legacy carriers to LCCs by corporate travel managers, and, of course, United’s decrepit onboard entertainment systems.

In other news, we look at the surprise Continental Airlines pulled on its pilot group last week. Hey, if the pilot group is going to keep waving the Delta Air Lines‘ pilot contract around — why not just give it to them? With a few minor revisions. That is exactly what the company has offered as a counter-proposal to what the pilots offered up in December.

Is this a good deal for the airline? For the pilots?

Meanwhile, Unite, the union that represents the cabin crew at British Airways made good on their promise to strike the airline this weekend. The airline estimates it has lost £7 million ($10.6 million) for each of the three days. It also says it will take the rest of the week to get itself re-positioned. Then– on Saturday, Unite has scheduled to begin a four-day strike against the airline.

Not to be outdone by the British Airways‘ cabin crew members, pilots at Germanwings and Lufthansa Cargo are now set to join Lufthansa pilots in a strike against that airline in April. After Easter. (That was considerate of them.)

This last week ISTAT held its annual conference in Orlando. We talk about the feedback we received from several subscribers who were in attendance — and yes, ILFC’s Steve Hazy was there talking up his new airline leasing venture.

Meanwhile, lots of regulatory news last week from the FAA, the NTSB, and the Office of the Special Counsel. We talk about all that — and yep, then there was that “Flight from Hell” on Virgin America last week. JetBlue saved the day. Ouch.

On the analyst front — Dan McKenzie with Hudson Securities issued an informative research note last week that looks at the changes in the competitive capacity game. We always like those.

All this — and a lot more. In this week’s issue.

British Airways and Qantas Crank Up the Merger Machine

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It seems that we have news of a merger a minute these days — but nothing U.S. based. Yet.

This morning, hot on the heels of the news that Ryanair was once again mounting a hostile attempt to take over the 70% of Aer Lingus it does not currently control (a move which, not surprisingly the Aer Lingus management team quickly denounced) today we have news of an attempt at a true blockbuster link-up.

British Airways and Qantas are apparently in discussions to do the dastardly deed.

According to Bloomberg,

“The airlines are discussing a combination after the Australian government said today in a policy paper that it might ax a rule barring individual foreign holdings of more than 25 percent and total foreign airline holdings of more than 35 percent. Still, there are no plans to abandon the so-called “Qantas Sale Act” that says the carrier must remain 51 percent locally owned.

‘Any transaction would also comply fully with Qantas’s Sale Act and Australia’s international Air Services Agreements,’ Qantas said separately.

Negotiations on a merger are “advanced,” the Australian Financial Review said earlier. British Airways, Europe’s third-biggest carrier after Air France-KLM group and Deutsche Lufthansa, said it issued today’s statement in response to “media speculation.”

A merger of the two airlines would create an entity with annual sales of about $23 billion.

What a coincidence.AMR, parent of American Airlines also generates about $23 million in annual revenue.

And yes, you’d have to a blind person not to see why it is that the American Airlines-British Airways anti-trust piece of the pie is so important to this oneworld concept of world domination.

According to various reports out this morning, both airlines would retain their own brands. Sounds like another Air France/KLM type of set-up that is being proposed.