Category Archives: Uncategorized


September 26, 2013

home-typewriter copy 1Hello everyone! This week’s issue of PlaneBusiness Banter is now posted! This week we get you updated on the latest in the American-US Airways anti-trust case with the DOJ,  we take a look at how IATA sees airline profits shaping up worldwide for 2013, and we also talk a lot about a number of new airline commercials that have rolled out over the last week or so. United Airlines has a new brand campaign that just debuted, jetBlue has gone to the birds, and Southwest Airlines thinks you need to know about “doohickeys.”

What do our PBB subscribers think about all this? I summarize the feedback so far, as well as adding my own!

The IPO for Mexican airline Volaris rolled out last week. Shares went out at the bottom end of the range at $12/share. That’s okay. That still translated into $350 million to the airline.

Here is your test question for the week. Who is a major investor in Volaris?


The correct answer is: Bill Franke’s Indigo Partners.

Here is your second test question for the week. Who is the presumed buyer of Frontier Airlines?


The correct answer is: Bill Franke’s Indigo Partners.

You can put two and two together.

Airline stocks had another strong week last week, as analysts continue to issue bullish upgrades and estimate changes to 3Q13 numbers. It looks like the quarter will be a strong one.

However, as the IATA report this week suggests, North America is the exception worldwide. Earnings in the Asian-Pacific region have been especially hard hit this year.

Finally, we have been banned in Dallas. That’s right. I’ll tell you all about why I was scheduled to present at the Business Travel News 2014 Corporate Business Trends and Forecast conference in November — but I have now been disinvited. Why? Because a certain airline, a sponsor of the conference, apparently didn’t want me on the agenda. 

What are they afraid of? Where has the LUV gone?

Very bad move from a management perspective. That kind of heavy-handed stuff has no place in today’s bag of enlightened and transparent management tools.

It’s a busy week!

PlaneBusiness Banter Now Posted!

home-typewriter copy 1Good evening everyone. Last week I warned that we would be publishing on Friday so that we could, hopefully, wrap up our summer on a high note before we took a much needed three-week hiatus. We had assumed that U.S. Bankruptcy Judge Sean Lane would approve the AMR Plan of Reorganization on Thursday and a closing would be scheduled in the not-too-distant future.


This week I gutted our planned wrap-up of 2Q13 earnings to concentrate instead on the only real story of the week — the DOJ lawsuit against the planned merger of American and US Airways. A lawsuit that seems to have caught all parties on all sides completely by surprise.

As a result, much of this week’s coverage is devoted to the DOJ suit. I may, in fact, repost one of my columns in this week’s issue in PlaneBuzz over the weekend.

There was other news this week including a rather abrupt shift in CEOs at Sabre, we get readers updated on the July traffic numbers (and yes, PRASM estimates came in better than expected pretty much across the board) and we also talk a bit about Air Canada. There’s a reason that shares in the airline exploded last week. The airline posted much better-than-expected numbers for 2Q13.

Oil prices remain stubbornly high — we’ll tell you why we think that is — and we also take a look at the June DOT Air Travel Consumer Report numbers. In a nutshell? American Eagle is still running a horrible operation, United Airlines once again garnered the most complaints (although the trend is certainly improving) but remember last month when I pointed out how the metrics for Southwest, and particularly AirTran were starting to slide? Wait until you see the numbers for June.

For those of you who are subscribers, you may also recall that Southwest Airlines CEO Gary Kelly said in the airline’s recent earnings call that operations were not being affected by merger issues. I said in PBB then that the last month’s DOT numbers did not agree with that assessment. They really don’t agree this month.

Oh, and on the new JetBlue trans-con product — one analyst thinks the airline’s new product poses a real threat to United out of JFK. Remember, JetBlue has traditionally given the big guys fits on the lower end of the price scale. This new product however, provides a nice “medium” level of upgraded service, and you can bet the price is going to be compelling.

This means this time next year United could be fighting off Virgin America out of Newark and JetBlue out of JFK.

Never a dull moment in this industry. That’s for damn sure.

Next week, I’ll will, finally, wrap up our coverage for the summer. Stay tuned.

Have a great weekend everyone!




Update to This Week’s PBB Posting Schedule!

home-typewriter copy 1Mea Culpa. I forgot that with the redesign of the new blog, the Twitter feed was removed. As a result, I’ve received a number of inquiries as to why I have been “so quiet” in regard to the DOJ’s lawsuit against the proposed merger between US Airways and American Airlines. 

I would suggest that you follow my comments on Twitter at @planebusiness. I have been anything but quiet.

In addition, I had already alerted subscribers last week that this week’s issue would be posted later than usual this week — so we could get through today’s U.S. Bankruptcy Court hearing in New York and have time to comment on that. That hearing is now on lunch recess, and will continue in about an hour from now.

Meanwhile, short and sweet? I see nothing in the DOJ suit that was filed earlier this week that tells me they have a case that will stand up before a judge.  I believe that this is a “political line in the sand” that has been drawn by the DOJ — in an attempt to make themselves look like they are protecting the American consumer. It has nothing to do with the way in which the airline merger would or would not affect the consumer space. In fact, a rejection of this merger would do just the opposite. It would hurt the ability of both US Airways and American Airlines to compete both domestically and internationally. That does nothing to help the consumer.

Consumers don’t want a duopoly in the U.S airline industry. But that is what the DOJ seems to think would be preferable. Three is always better than two — and four is even better. Yes, unlike the DOJ, which ignored completely the fact that Southwest Airlines is the largest U.S. domestic carrier in the U.S. — they are, in fact, the largest domestic carrier in the U.S. We don’t ignore them, or their contribution to the competitive landscape.

More on all of this in this week’s PlaneBusiness Banter. We will publish on Friday this week.

In the meantime, I highly suggest a MUST READ. Brett Snyder, aka Cranky Flier, PBB analyst and Contributing Editor has posted an analysis of the DOJ complaint today on his blog. Read it. 

Talk to you again tomorrow.



Mega-Earnings Issue of PlaneBusiness Banter Now Posted!

home-typewriter copy 1Hello everyone. It’s that time. Yes, EARNINGSNADO! This week we jump in the earnings shark tank and take our usual long look at the four big guns that reported earnings last week — US Airways, Delta Air Lines, United Airlines, and Southwest Airlines. We also offer up PlaneBusiness Earnings Summaries on WestJet, Spirit, JetBlue, Alaska, Republic and Allegiant. 

For the next two weeks we’ll be playing catch-up as we take our longer looks at the entire group. 

So last week — how did the top four guns perform?

It was a split decision. US Airways and Delta Air Lines turned in excellent margins and excellent quarters. Southwest Airlines and United Airlines — not so much.

Don’t get me wrong. All four airlines made money. But in this sector today — just making money isn’t good enough anymore. Hard to believe, eh? The name of the game now is margin expansion. The name of the game is ROIC. Now that an airline has a plan in place to make money and control its costs,  how can it maximize those two even more.

In the meantime, how many of you can tell me what RINs are? Or how about a nonuplet? Read PBB and you’ll find out why both were linked to airlines and their earnings last week.

But we have lots of other news to talk about as well. The creditors of American Airlines voted earlier in the week on the airline’s restructuring plan. The airline issued preliminary numbers Thursday morning — the plan has been voted for overwhelmingly. As expected.

With the European Commission expected to make its decision public next week (US and AA will reportedly have to give up one Philly-Heathrow route), the only remaining regulatory hurdle is the Department of Justice review. Reports are that both the airlines and the DOJ are actively involved in talks to come to an agreement for the DOJ’s approval.

As a result, the scheduled August 15th court date in U.S. Bankruptcy Judge Sean Lane’s courtroom looks like it should go smoothly and the restructuring plan should be approved.

After that — it’s showtime. Yep, it’s going to happen. We’ll have ourselves another merger.

Delta Air Lines announced a new hourly Shuttle product on the West Coast today. Looks like the airline is going after corporate and business travelers who fly between SFO and LAX. The new product will be flown by Delta Connection partner Compass Airlines using E-175 Embraers outfitted with a three class configuration.

Anyone else think that market is already a little crowded out there? This one is going to be fun to watch.

All this and so much more is on our plate this week in PlaneBusiness Banter. Subscribers can access this week’s issue here!


July 19, 2013

home-typewriter copy 1Hello everyone. Mea culpa for the lateness of the posting of this week’s issue. I’m afraid when one is self-employed, it’s hard to “call in sick.” In addition–  the cat can’t type.

But we made it. Finally.

As puny as I was this week, I think we have a pretty good issue for you. First our contributing editor, analyst, and chief airline dork, Brett Snyder takes a thorough look at the recent GAO study that looked at the proposed American/US Airways merger. I’m sure you won’t be surprised to find out that he thinks the GAO took some shortcuts with this study. In addition, there’s nothing in here that points to any reason the Department of Justice should not approve the merger. Contrary to what some die-hard anti-merger pundits out there would like you to believe.

We also look at the May DOT Air Travel Consumer Report this week. We’re detecting some trends over the last few months — the most notable being a decline in the operations of both Southwest Airlines and AirTran. 

We told you so.

We told PBB subscribers in December, after the airline’s investor day presentation, that Southwest did not seem to have any idea how problematic its planned codeshare move this spring could be for passengers. Analyst Bob McAdoo at Imperial Capital said at the time that the negative publicity could rival that generated by United Airlines in 2012.

That’s exactly what’s happening. Scott McCartney, columnist with the Wall Street Journal, touched on some of the issues in his column this week.

But we talk about a whole lot more this week as well:  Asiana; Spirit Airlines’ complaint numbers; Alaska Air Group’s new dividend (the new of which sent shares soaring last week); a JP Morgan downgrade of both JetBlue and Southwest; why crude oil and jet fuel prices are soaring; and we get caught up with all things American. And US Airways.

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

Now, excuse me while I go make some green tea and swallow more antibiotics.

PlaneBusiness Banter Now Posted!

home-typewriter copy 1 Hello everyone. It’s that time again. Time for this week’s edition of PlaneBusiness Banter

This week we are talking a lot about the obvious — the crash of Asiana Airlines Flight 214 in San Francisco. But we don’t really get into the particulars of the “why” — that is what the NTSB is working on now. Although if we were to guess, it isn’t going to take that long to figure this one out. Or as I said in this week’s issue this isn’t a TWA 800 situation.

In our column this week we look at the communications surrounding the crash. How quickly Asiana did or did not respond on Saturday, how inept the coverage of the crash was on CNN, and how social media is where you found the most accurate information most quickly.

As I point out, when you have a survivor of an airplane crash Tweet that he just got off the plane — we’ve just crossed a new boundary here folks.

On the stock side, it was a pretty good week for the sector — not outstanding — but acceptable.

However, shares of Brazilian airline GOL once again took a huge hit, as they dropped 17%. That didn’t stop Imperial Capital analyst Bob McAdoo from initiating coverage and voicing a very bullish argument on why now might be a great time to jump into the stock.

As you know, we are a big fan of Bob’s.

Unfortunately the news from the oil markets was not what the airlines wanted to hear last week. Nor has it been this week either. The reason — the political unrest in Egypt. Oil moved up sharply last week, and it has not slowed down this week — hitting a new 15 month high Wednesday. Jet fuel has not been that far behind.

So sit down, make yourself a Moscow Mule, and enjoy a good read. All this and more in this week’s edition of PlaneBusiness Banter.

PlaneBusiness Banter Now Posted!

home-typewriter copy 1Hello there Earthlings. This week’s edition of PlaneBusiness Banter is now posted. I’m going to be rather brief this evening, as frankly, I’m pretty darn tired. It’s been a long day!

This week we began to get more feedback from the analyst community on just how 2Q13 results are shaping up. United Airlines issued updated guidance last week – the airline now could post lower margins for 2Q13 than it did a year ago. Not quite what a lot of people were expecting.

Southwest’s goal of reaching a 15% ROIC in 2013? Probably not going to happen.

US Airways, meanwhile, looks poised to post the best operating margin of the big four U.S. carriers for 2Q13.

Traffic and PRASM estimates (at least from those airlines that disclose them) continue to roll in this week and next.

Before you know it, it will be time for earnings calls once again.

In terms of second quarter stock performance, the sector did not post quite as strong a quarter as it did for the first quarter.

But it was still an acceptable quarter.

We go over which airlines fared the best and which ones tanked for both 2Q13 and for the last week.

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


PlaneBusiness Banter Now Posted!

home-typewriter copy 1Good evening everyone. This week’s issue of PlaneBusiness Banter is now posted.

This week we talk a bit about the newly-approved Delta Air Lines/Virgin Atlantic JV. The two airlines begin codesharing next week. We’re now officially also taking bets on how long it will be before the “Virgin” brand is more or less “melded” into the Delta brand.

As I’ve mentioned before, feedback from my corporate business travel groups continue to indicate that the Virgin product is “tired.” I’d say the main reason: lack of money to spend.

One thing’s for sure. Virgin does have nice slots at Heathrow.

In other news, we’ve been monitoring the operational performance of the major players this month — to see how they are coping with the busy summer season. Last year United Airlines fell down on the job. This year — American Airlines is turning in abysmal operational performance numbers.

This week we also wade through what was an incredibly overflowing group of feedback letters from last week. Subscribers are talking about everything from missing United Airlines‘ fight attendant uniforms (what happened to the COOL blue dress?) to the TWA 800 documentary to visual proof that the new American livery definitely looks even worse on an A319.

The Paris Air Show also wrapped up last week. We’ll have the final testosterone tallies for you from there as well.

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

PlaneBusiness Banter Now Posted!

home-typewriter copy 1Hello everyone. This week’s issue of PlaneBusiness Banter is now posted.

This week we talk about the new American Airlines‘ management team. As we had anticipated, the team was announced this week — and we tell you what we think of the choices.

We also talk about an arbitration that recently ended between JetBlue and a group of its pilots. Bottomline — the arbitrator found in favor of the pilots. This could not only prove to be a sizable expense for the airline, but it creates all kinds of other issues as well. Meanwhile the airline remains tight-lipped about what it intends to do.

Guess what’s supposed to fly on Friday? Yep, that’s right. Oh to be in Toulouse. The Airbus A350 is scheduled, weather permitting, to make its first flight. Raise your hand if you are surprised. Yeah, I didn’t think so. Paris Air Show, here it comes!

It was a decent week for airline stocks last week, with Air Canada leading the group and shares of GOL once again losing ground.

Ancillary revenue? Which airline do you think made more ancillary revenue per passenger in 2012? Hint: This includes revenue from frequent flyer miles sold.

We have lots and lots of letters this week. And much, much more.

All in this week’s issue of PlaneBusiness Banter.


New American Airlines Management Team Announced

The news this morning from American Airlines and US Airways re: the new management team held no surprises.  The line up is what we had expected and had discussed at length last week in PlaneBusiness Banter. 

The majority of the top positions at the new American will be filled with current executive team members from US Airways with three exceptions.

·        Doug Parker, CEO (Doug will assume Chairman position after first board meeting post-close; current American Chairman and CEO Tom Horton will be acting Chairman until that time as previously disclosed.)

·         Scott Kirby: President

·         Elise Eberwein: Executive Vice President, People and Communications

·         Bev Goulet: Chief Integration Officer

·         Robert Isom: Chief Operating Officer and Chief Executive Officer of US Airways, Inc. post-close

·         Steve Johnson: Executive Vice President, Corporate Affairs

·         Derek Kerr: Chief Financial Officer

·         Maya Leibman: Chief Information Officer

·         Will Ris: Senior Vice President, Government Affairs

We had expected that current SVP of Government Affairs for American, Will Ris, would be staying on with the new company. This is good news. He will now report to Steve Johnson, EVP of Corporate Affairs.

We would guess that Bev Goulet, who is currently working with US Airways COO Robert Isom on the integration process, will stay in her role as Chief Integration Officer until the integration process has been completed.

Also good news — Maya Liebman will be CIO of the new company.

The company also announced that Dan Garton will be leaving his position with American Eagle later in the year. No replacement for him was announced.