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