Tag Archives: Southwest Airlines

PlaneBusiness Banter Now Posted!

Good evening earthlings. Our last summer “kitchen sink” issue of PlaneBusiness Banter is now posted. Alas. We were supposed to already be on vacation. But then the Department of Justice decided to sue American Airlines and US Airways last week.

So we bumped our three remaining 2Q13 earnings call reviews to this week. We also had a feeling that we’d hear more important information in regard to the DOJ’s machinations — which we did on Thursday.

So this week we wrap up 2Q13 earnings, including a look at break-even load factors and operating margins, we update you on the latest between the DOJ and American and US Airways, we take a sneak peek at how the bigger players are doing in terms of on-time performance in August, we muse about whether or not an airline should be named “Vanilla” and we go through a lot of mail.

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

PlaneBusiness Banter Now Posted!

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Hello everyone!

Oh my, oh my! It is rather exciting in the DFW Metromess tonight. Reports indicate that the UCC, and the board of directors at both American Airlines and US Airways have approved a merger between the two airlines.

Whew. Finally!

We should see a formal release around 7:30 in the morning, an analyst call after that, and a press conference at DFW International at 10 AM. At some point later in the day the members of the US Airways’ management team will fly back to Phoenix for a press event there.

Details leaked this afternoon indicate that the deal is pretty much what we have outlined previously in PBB – a 72/28 equity split, current US Airways Chairman and CEO Doug Parker will become CEO of American Airlines, the headquarters will be in Dallas.

However, it does appear that while current AMR Chairman and CEO Tom Horton will stay on in a non-executive role — his stay will be much shorter than the 2-year period that had been rumored a couple of weeks ago. Sounds like he may stay only into the early part of 2014.

Happy Valentine’s Day!

But hey, we have a lot of other things we are talking about in this week’s issue of PlaneBusiness Banter. We have complete reports on the recent fourth quarter earnings reported by Air Canada and WestJet. We also take a summary look at the numbers from both Ryanair and Singapore Air.

We also have the December 2012 and full-year DOT Air Travel Consumer Report rundown.

In addition, we spend a lot of time this week talking about Boeing. And dendrites. And Dr. Goodenough.

No, I’m not making this up.

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

PlaneBusiness Banter Now Posted!

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Hello everyone. It’s that time again. That’s right — it’s earnings time in PlaneBusiness Banter.

This week we roll out our “All-New” PlaneBusiness Earnings Review format, which I hope subscribers will find easier to dissect, peruse, and digest.

This week we take our in-depth look at the results reported last week by Delta Air Lines, US Airways, Southwest Airlines, and United Continental Holdings, parent of United Airlines.

Short and sweet? Delta Air Lines blew away the competition in 2012, but US Airways had a record breaking profitable year as well. It really is gratifying to see two major U.S. airlines turning out such great financial results.

United? The slog of its merger integration continues. 2012 was not a good year and it was really not a good quarter for the airline. However, we certainly detected a change in tone on the airline’s call this quarter — for the better — and we are looking forward to watching the airline as it tackles 2013.

While it seems the airline now knows what it has to do — now it has to do it.

Then there was Southwest Airlines. (We’ll talk about Alaska Air Group and its results in next week’s issue, along with Allegiant, Hawaiian and JetBlue.)

The results from Southwest were not overly impressive. In addition, analyst Jamie Baker with JP Morgan got into a rather interesting discussion with management at the airline concerning “brand.”

In a follow-up note to investors, Baker made the point that it seems the airline continues to make decisions based on brand, and not necessarily maximization of returns to investors and improved profitability.

It is an interesting concept, and we basically agree with him.

Of course we talk about about the American Airlines-US Airways merger process. Lots of things to talk about on that front this week, including our take on the rumors that Tom Horton, who is currently Chairman, President and CEO of AMR, might possibly stay on with the merged airline in some capacity — perhaps Chairman.

To say this story caused an avalanche of emails at the Worldwide Headquarters today would be an understatement.

Then there is Boeing — and that little problem of battery fires on its 787s. Boeing reported earnings today. We’ll catch you up on the latest with the company’s comments concerning the 787, and we update you on the latest progress in the hunt to find out just what the problem is.

All this, and much, much, more, including the Republic Holdings/AMR/Embraer deal, in this week’s issue of PlaneBusiness Banter.

PlaneBusiness Banter Now Posted!

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Good evening everyone!

The first issue of PlaneBusiness Banter for 2013 is now posted. And yours truly is sick as a dog. As a result, it’s going to be a short summary tonight.

I am desperately in need of more tea, more medicine, more chicken soup, and more sleep. Bleech.

However, before I crawl away and climb under the covers, here’s a peek at what we are talking about in this week’s issue.

Taking the top spot of course are the problems with the Boeing 787. The week began with a fire on a Japan Airlines 787 in Boston, and it’s pretty much continued to go downhill ever since. I think it would be safe to say it’s not been a good week for our friends at Boeing.

Since we did just end both a year and a quarter, we have all kinds of airline stock charts for you to peruse this week. Taking the top spot for performance in 2012 were shares of US Airways. The shares picked up a cool 166% for the year.

On the American/US Airways front, we expect we should hear something formal in terms of a merger agreement before the end of the month. My bet is the announcement is made before US Airways releases its earnings. Stay tuned.

This week we talk a lot about Southwest Airlines. Taking the cue from analyst Bob McAdoo from Imperial Capital, we revisit the information the airline released at its recent investor day in December — and we note the airline has already been forced to backpedal on some of its announced increases in fees it made that day.

Like I say, we talk a long time this week about the airline. And not a lot of it is overly enthusiastic.

We also bring you a super secret list of New Year’s resolutions. That’s right. We have the New Year’s resolutions from a number of airline CEOs — both current and past.
As for the AMR Bankruptcy Follies — this week we dissect the “Bob Crandall” video that had so many people talking while we were on Holiday Hiatus.

An American Airlines‘ exec leaves to become CEO of Virgin Atlantic, we give you a look at the messages several airline CEOs sent to their employees at the end of the year, and we even update you on Pinnacle, which, as everyone had assumed, is going to exit bankruptcy as a wholly-owned subsidiary of Delta Air Lines.

All this and more (cough, cough) in this week’s issue of PlaneBusiness Banter.

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 Now Posted!

home-typewriter copy 1.jpg Hello everyone. A very short preview of this week’s issue tonight. I have a good reason. I have to get on an plane early in the morning. And I have to be coherent when I get off the plane. The clock is not my friend at this point.

So — here is a quick overview. American Airlines and its bankruptcy? Check. United’s new 787 livery? Check. United’s continuing operational problems? Check. Delta, Southwest and Boeing finally make the 717 deal official and Delta gives more details on how the aircraft are going to be configured and how they are going to be deployed. Check.
Then there is Farnborough. Will United go with Boeing or Airbus? I think the answer is pretty obvious. Not a very well-kept secret.
I attended the recent Association of Travel Marketing Executives Conference in Chicago where I spoke about the current state of the airline industry. This week I give you an overview of the opening presentations and why I thought the conference was a worthwhile event.
Five years? Really? American is hanging banners in airports talking about how it is working on giving passengers the industry’s youngest fleet ….in five years?
Airline stocks had a pretty good week last week. We’ll tell you who picked up the most ground and who dropped back.
All this and much, much, more in this week’s issue of PlaneBusiness Banter!

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 Now Posted!

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Good day everyone!

My thanks to all for your patience. PlaneDad duty once again took me away from our normal perch here at the Worldwide Headquarters this week.

The good news? PlaneDad is finally making the move to Texas. And he has a place to live when he gets here!

Thank you again for your patience with our nebulous publishing times of late. Just something that can’t be avoided, given what else is going on. We’ll get through it.

So — having said all that, what are we talking about in this week’s issue of PlaneBusiness Banter ? A lot.

Easily the biggest news is the fact that Delta Air Lines and Southwest Airlines finally confirmed that yes, Delta Air Lines will be leasing the entire 717 AirTran fleet from Southwest.

This move is a big one — in more ways than one. There are winners, and there are losers. We talk about some of them in this week’s issue.

Last week the usual suspects were all in Boston, presenting at the Bank of America/Merrill Lynch Global Transportation Conference. We let you in on some of the more interesting comments including those by Ed Bastian, President of Delta Air Lines, Scott Kirby, President of US Airways, Gary Kelly, CEO of Southwest Airlines and Mark Powers, CFO of JetBlue.

We also have a guest column this week by a PlaneBusiness Banter subscriber. His opinion is that airlines need stop the “silo” thinking that pervades so much of the industry and mover more towards what he terms an “Intersilotic” approach. Being the “big picture” person I am, I’m all for it. While some aspects of the industry certainly can benefit from a vertical approach — much more of it should take into consideration the entire team effort — not just the actions of one part of the team.

Of course no PlaneBusiness Banter would be complete these days without the AMR Bankruptcy Follies column. This week we have a short one-act play for you to read, and we update you on the 1113 process.

We also have Scott Kirby’s comments from the Bank of America/Merrill Lynch Global Transportation Conference, in which, or the first time I’ve heard publicly, he clearly and concisely explains why it is that a merger between AMR and US Airways would be beneficial to both pilot groups — USAPA and APA. While his comments dovetail with what we have assumed would be the case — this is the first time I’ve heard someone from the airline put it out there for public consumption.

Oh and yes, we also offer our condolences to American management employees, who are being subjected to a flood of obnoxious communications from the airline. If it isn’t the latest “design and layer” update, it’s superficially happy missives concerning how to handle this new “opportunity in your life!” Yes, they are talking to those employees who are going to be laid off.

We also have the 1Q Break-Even and Operating Margin run down, a look at how the market treated the airline sector last week, and much, much more. As usual.

Southwest Airlines Finally Announces What We Told Subscribers in March: 717s Going to Delta

In March, we reported in PlaneBusiness Banter that Southwest Airlines was going to offload its Boeing 717s to Delta Air Lines.
The company subsequently hemmed and hawed around the topic, but they never denied it.
Last week, I then reported that the 717 flying had been addressed in the tentative agreement between Delta Air Lines and its pilot union.
Finally, today, Southwest Airlines announced that yes, it has agreed to a deal that will see all 88 of the former AIrTran 717s go to Delta Air Lines.
This negatively impacts those AirTran 717 pilots who had been the beneficiary of a “carve-out” as part of the seniority agreement with the Southwest pilot group. Their “preferential” treatment will end — when those 717s depart. The carve-out was only applicable as long as Southwest Airlines flew the aircraft.
On the flip-side, this is good news for Southwest Airlines’ pilots — as it will move them up in terms of seniority.

PlaneBusiness Banter Now Posted!

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Good evening everyone.

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

This week we have another mega-earnings issue, as we take a close look at the recent earnings calls from Hawaiian Airlines, Allegiant Travel Company, Spirit Airlines and Republic Holdings. Republic was the only one of the group not to post a profit for the first quarter.

Of course Spirit was in the news last week for other reasons — namely its decision to hike the charges for carry-on bags and for their initial refusal to refund a $197 ticket to a terminally-ill ex-Marine. By the time the week was over, the bag charge increases were still in place, but the airline’s CEO Ben Baldanza personally refunded the cost of the ticket and the airline contributed $5K to the Wounded Warriors organization.

For once the airline discovered that bad publicity was not better than no publicity.

In other news, Southwest Airlines and United Airlines slugged it out again in Houston Tuesday before an overflow crowd at the Houston City Council chambers.

Southwest wants to fly internationally out of Hobby Airport, and has asked the city for permission to build a new international addition to the current airport at a cost of roughly $100K.

But United is not amused. Especially since it just broke ground in January on a $700 million expansion and improvement of its facilities at IAH, which will include more international gate expansion.

Most interesting factoid from Tuesday’s testimony and questioning — on the day United Airlines broke ground on its new IAH expansion in January, Southwest’s Gary Kelly was talking to the Houston mayor about its desire to fly internationally out of Hobby.

Oh, this is such a cruel dog-eat-dog business.

This week we also have our latest AMR Bankruptcy Follies column. This week we look at the position of the bondholders in the bankruptcy process — why they want to get as much as possible back from the airline and how this return could be maximized as a result of a US Airways merger with American while it is still in bankruptcy protection.

Last week shares of Republic and Spirit were the laggards for the airline sector, but the price of oil plunged. That’s good news. So far this week — oil prices have continued to move downward.

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