Category Archives: Ratty Old Bear Suits and Raging Bulls

PlaneBusiness Banter Now Posted!

home-typewriter copy 1Good evening everyone! We’re baaack!

Yes, vacation is over, and it’s time to get back to work. Or at least that is what I kept telling myself last week. As a result, this week’s issue of PlaneBusiness Banter is now posted.

This is one of our “catch-up” issues. It’s rather difficult to compress three weeks into one issue, but I tried to talk about those topics we thought were most noteworthy. Or at least mention them!

On the stock side, August was a great month for airline stocks. The dog days of August are often times not that friendly to the things with wings, but that was not the case this  year. The only negative about August was the sharp decline in jet fuel inventories that occurred right before Labor Day in the Northeast. The shortage caused jet fuel prices to jump more than 6% that week, as inventories fell to record lows.

All is now back to normal on that front as a number of  tankers have been able to get into New York Harbor and offload their cargo.

In other news, Southwest Airlines and Frontier Airlines will both roll out new liveries this week. Pics of both were leaked over the weekend. We posted the Southwest Airlines livery last night. Here is a shot of the new Frontier livery. The green livery with the feathered “F” harkens back to previous branding at the airline — years ago.



In other news, we talk a bit this week about the union activity over at American, get you updated on that, although I did not get into detail about the decision by American to pull flying from Envoy and give it to PSA. A number of the folks we wanted to talk to just simply weren’t able to be tracked down before we published. I’ll revisit this move by the airline this week.

Speaking of this coming week, look for analysts to be watching the traffic reports issued by the airlines very carefully this week. Delta reported less than robust PRASM numbers for August last week, and analysts will be watching everyone else to see if it is a one-off for Delta only, or if the rest of the industry is showing any signs of weakness as well.

Tomorrow morning, I am off to the Southwest Airlines Media Day. More on that in next week’s issue.

Have a great week everyone. Talk to you again next week.

PlaneBusiness Banter is Now Posted!

home-typewriter copy 1This week’s issue of PlaneBusiness Banter is now posted. This week we take an in-depth look at the recent earnings reported by Southwest Airlines, JetBlue, and Alaska Air Group. We also have summarized takes at Ryanair, IAG, and Lufthansa. Finally, we have earnings summaries posted for Spirit and WestJet this week.

A bit of comment on the foreign flyers in the group – IAG, parent of British Airways, Vueling and Iberia, clearly took the top spot this quarter for the major European carriers. Meanwhile, Lufthansa, which had already pre-warned on earnings in June, reported numbers that were far worse. This, after Air France-KLM didn’t wow anyone with their 2Q14 earning last month either.

Another winner across the pond? Ryanair, which easily beat expectations for the quarter.

On this side of the pond we talk about Southwest Airlines and its aspirations, we muse about how we believe Alaska Airlines holds the bulk of the leverage in the Battle for Seattle with Delta Air Lines, and we talk about JetBlue and its transitional year.

We also take a short look at the recent earnings results reported by Spirit and WestJet. 

Which reminds me. Were you aware that WestJet plans to acquire wide-bodied 767s — which it intends to use to fly to Hawaii? Didn’t think so.

Switching gears, last week we attended the Global Business Travel Association (GBTA) conference out in Los Angeles. Just me and 6,000 of our closest friends.

We’ll give you the scoop on what the three major U.S airline CEOs — Richard Anderson, Doug Parker, and Jeff Smisek, had to say at the conference, along with a lot more.

As for airline stocks last week, it was a bad week — just as it was for the markets in general. Goat of the Week honors went to shares of SkyWest. 

All that — and more — this week in PlaneBusiness Banter. 

PlaneBusiness Banter Now Posted!

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

Last week the bulk of the major U.S. airlines we follow reported 2Q14 earnings. We will have a few stragglers come in this week and next, but in terms of the big boys, all of them rolled out the numbers. In this week’s issue we’ll take a long look at the results reported by American, Delta, and United Airlines. 

Which one of these three was the biggest surprise? United Airlines. In terms of the airline’s earnings call, I thought it was the best since the merger. In addition, as we told PlaneBusiness Banter subscribers more than a month ago, we continue to hear nothing but good things about Greg Hart, the COO at United. This quarter did nothing to change that opinion, and we were glad to hear him on the airline’s earnings call.

As for Delta Air Lines, the airline produced yet another strong quarter, showing once again why it indeed at the top of the heap. Excellent job by the guys in Atlanta.

American Airlines also rolled out a very strong quarter — particularly so considering the airline is in the middle of a huge merger integration.  If you are wondering why shares of AAL took a bit of a dip last week, it is because it’s RASM guidance was not as strong as some analysts had forecast. The big culprit here — the airline’s situation with Venezuela. Not only does Venezuela owe the airline hundreds of millions of dollars, but the airline will not see revenues impacted going forward as a result of its substantial reduction in service to Venezuela.

Short-term problem.

Long-term? The airline continues to look good. The airline also surprised investors with news of a stock buy back and a dividend payment. (United also announced a stock buy-back program.)

All this, and much, much, more in this week’s mega-earnings issue of PlaneBusiness Banter! 


PlaneBusiness Banter Now Posted!

home-typewriter copy 1Hello earthlings. It’s that time again. Time for the latest issue of PlaneBusiness Banter.

Not going to talk too long this evening, as frankly, it was a rather depressing issue to write this week as a result of Malaysia Airlines Flight 17. We talk a lot about the flight in this week’s issue, and about the travesty of the fact that as of this posting not one international aviation authority or investigator has been allowed at the scene of the crash in Ukraine.

As I said, it’s a rather depressing situation.

But that’s not all we talk about this week. We have the usual update from Wall Street, we prepare you for the 2Q14 earnings onslaught that begins this week, and we have a great Cranky Analysis column this week that takes a look at the airline everyone loves to hate — except investors. That airline is, of course, Spirit Airlines. PlaneBusiness Contributing Editor Brett Snyder digs in the data this week and comes up with some interesting stuff (as he always does) including the answer to the question of whether Spirit merely “stimulates” a market when it goes into it, or whether it steals market share from other airlines. (I’ll give you a hint. It depends on the airline.)

All this, and more, in this week’s issue of 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 are talking about everything from Spirit’s “Hate” campaign to the Frontier Airlines’ Captain who ordered pizza for everyone on his diverted flight. But in-between we talk about  a lot of serious stuff too.

After Delta’s announcement that it had seen a bit of weakness on the international front the week before, and the thrashing that Wall Street did to the sector as a result, all eyes were on the rest of the “Big Four” last week as they issued traffic updates, RASM updates, and in some cases, margin estimate updates.

So what did we learn?

We learned that Delta Air Lines and American Airlines will post the best margins for 2Q14. We learned that while United Airlines did forecast a better than expected RASM performance for 2Q14, the airline will still lag both of its major peers in terms of RASM performance and margin performance.

Oh, and if the revenue brains at United are still trying to digest Imperial Capital analyst Bob McAdoo’s recent long research report in which he made the case why United should shut down its hub at IAD, last week he came out with another long look at United and its revenue woes. But this time he focused on the West Coast. We’ll tell you what he thinks the airline should be doing there and how much money they are losing because they aren’t.

But that all of this didn’t matter to Wall Street investors, as they jumped back into shares of United Airlines last week with a vengeance after the airline upped its previous RASM guidance. The stock ended the week up 15%.

Meanwhile, for all the aircraft geeks out there, the Farnborough International Airshow opened Sunday. Lots of news already from there, including a confirmation of a huge Boeing 777X order with Emirates; a much-needed Bombardier CSeries order from a British leasing firm; and Boeing confirmed Sunday that it is going to adapt the 737-800 MAX so that it can have a maximum seating capacity of 200.

Whew.  We figure this means that big Ryanair’s order can’t be that far behind.

The move to appeal to the ULCC crowd is not unexpected from Boeing. Airbus had already announced it June increases in maximum capacity seating for both the A320 and the A321.

But this is just the tip of the iceberg. We talk about Norwegian, and their new service to New York; we talk about the pros and cons of why Norwegian should be allowed to operate its new subsidiary in the U.S.; we talk about the latest DOT Air Travel Consumer numbers (hint: Delta continues to lead the big four; Southwest continues to lag; and Alaska Airlines had another great month) and much, much more.

All in this week’s issue of PlaneBusiness Banter!

PlaneBusiness Banter Now Posted!

home-typewriter copy 1Good evening earthlings. This week’s “Summer Solstice” issue of PlaneBusiness Banter is now posted.

This week we talk a lot about American Airlines, as we attended the airline’s Leadership Conference in Dallas last week. You know I am a culture queen — one that believes strongly in the power of empowering employees through clear, consistent, and persistent communications from management.  Yes, well, the conference reinforced the management/employee relationship that we had seen at US Airways for years prior to the merger.  We weren’t surprised, but I think some American Airlines’ employees were. But by the end of the day, I think all of the 1500 or so folks in the room got it. And some walked away with a T-Shirt to prove it!

American was also out buying slots at Heathrow last week, it awarded the flying of 20 regional aircraft to Compass; and its passenger service agents received the “single carrier status” from the National Mediation Board. A representational election for the combined employee group will now be scheduled.

On Wall Street, airline stocks enjoyed a much better week than the week before — even though the price of jet fuel shot up. We talk a lot this week about what is going on in Iraq and how this could impact not only the price of jet fuel, but the economy as a whole. What price per barrel threshold do you think the U.S. economy can absorb before it is affected negatively?

We talk a lot about why we like the move from “miles based” frequent flyer mile programs to those based on “spend.” That’s the way it should be and we’ll tell you why it benefits both passenger and the airlines.

Delta Air Lines opened up its new museum to the public last week. Can’t wait to visit. The museum is the site of the first public fully-functioning flight simulator. (An old Boeing 737-200 to be exact!)

Oh, and yes, we also talk about that utterly confusing 8-K that United Airlines filed last Friday in which it talked about the termination of employment contracts with three top execs at the airline.

The wording of the filing was awful. People are antsy enough right now about possible changes at United. Add all of this to the fact the news of the filing was on a Friday, and it made for the perfect storm. I received over 100 emails from people concerned about it, wondering if indeed John Rainey, Jim Compton and Jeff Foland had been fired. No, they have not been fired. Their employment agreements were simply changed so that they would be in synch with other top execs at the company. 

Like I say, the wording was not the best. Even I was confused — and I read it about four or five times.

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

PlaneBusiness Banter Now Posted!

home-typewriter copy 1Good evening earthlings! It is yet another dark and….warm night here in the Metromess. The latest edition of PlaneBusinesss Banter is now posted.

This week we recap what was a very United Airlines-centric week last week. Not only did I fly on the airline’s trans-con p.s. product for the first time, but I also made my first flight on a Boeing 787 Dreamliner. Again, compliments of United. 

Oh, and I also attended the Tony Awards last Sunday night. Thanks to United. (That’s a whole ‘nother story!)

Finally, last Thursday, United Airlines’ SVP of Global Sales Dave Hilfman and I rocked the house at a joint Silicon Valley Business Travel Association/Bay Area Business Travel Association dinner meeting in San Francisco. I’m not sure who was the dog and who was the pony, but our yin/yang combination of sales hyperbole, financial analysis, and overall knowledge of the industry — peppered with a healthy dose of good humor and snarkiness — seemed to be well received. We’re thinking of taking our act on the road.

My thanks again to Ron Wagner, who extended the invite to the two of us to participate. It really was a heck of a lot of fun, the audience was large and asked a lot of questions, and I think everyone enjoyed themselves.

In other airline industry related news, it was a horrible week on Wall Street last week for the sector, after stocks were hit with two big jolts. One was Lufthansa’s profit warning for both this year and next. The second was the sharp rise in the price of crude oil — a result of political tensions surrounding the goings-on in Iraq.

Meanwhile, we also talk about the DOT April Air Travel Consumer Report, we get subscribers updated on the latest traffic and PRASM estimates from the usual suspects, and we also welcome a new contributing editor to PlaneBusiness Banter — Frank Arciuolo. This week Frank takes a look at the recent move by Delta to bring the development of its PSS system in-house, back from Travelport. 

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

PlaneBusiness Banter Now Posted!

home-typewriter copy 1Good evening everyone! How was your Memorial Day weekend? Mine was spectacular! I hope you had a great start to summer as well.

This week we have somewhat of a hodge podge in PlaneBusiness Banter.

First, we have a great analysis this week by Brett Snyder, aka Cranky Flier. This week Brett, who moonlights as a contributing editor for PlaneBusiness, looks at American Airlines and how it has been performing out of its home turf — DFW — over the last several years. In a nutshell — not well. But he dives into the data and tells us just how poorly. In addition, he stumbled upon a little nugget of information about Spirit and one particular American route that we think subscribers will find particularly interesting.

Bottomline? There’s a lot of opportunity here if American can get its act together. (And given the track record of the new management team at American, we’re betting this is going to be the case.)

We also talk a bit more this week about the situation in Dulles, and give you an extensive review of how the combined market looks out of DCA and IAD for both American/US Airways and United Airlines. Oh, there are lots of interesting things to look at here.

Meanwhile, out in the Northwest, Delta Air Lines and Alaska Air Lines opened up yet another round of artillery fire last week with a series of announcements (within hours of each other) concerning new service out of Seattle.

I’m not so sure how this story is going to end. But in the meantime, it’s certainly interesting to watch.

Delta and Travelport announced their new deal last week — the one that will see Delta taking control of its PSS development and management from Travelport. But Travelport will continue to host the system. I’ll tell you why I think this is a good deal for both sides.

Ryanair announced its fiscal year and fourth quarter earnings last week. While results were down, on a year-over-year basis, analysts are apparently convinced that the airline will be successful in its easyJetrification process. Ahem.

All this, and much, much, more, including a great week for airline stocks, in this week’s issue of PlaneBusiness Banter. 

PlaneBusiness Banter Now Posted!

home-typewriter copy 1Good evening boys and girls! This week’s edition of PlaneBusiness Banter is now posted!

This week we take an in-depth look at the recent earnings calls from both Air Canada and WestJet. We also take a summary look at the recent earnings reported from the big three GDS players — Amadeus, Travelport, and Sabre. 

Bottomline — Sabre and Travelport still have too much debt on their balance sheets. Travelport said in comments after their earnings call that they may sell their piece of Orbitz. I think that would be a great idea, as I’m not sure an IPO would go over that well right now. I mean, look at how underwhelmed the Street was with the Sabre IPO.

As for Sabre, they bent over backwards to emphasize to investors as part of their call that they are working to reduce the level of debt on their balance sheet. But it’s still too high.

That’s the not-so-good part of leveraged buyouts.

As for the Air Canada/WestJet results, I can’t say I was that overwhelmed or impressed with much of anything I heard from either airline. Clearly the big loser here was Bombardier, as Air Canada announced it has decided not to replace its Embraer 190s. Most people had assumed they would place an order for the new Bombardier CSeries aircraft. Nope.

In other news, the City Manager of Dallas finally did what he should have done originally — given what the Department of Justice said he needed to do. As a result, Virgin America now has two gates at Love Field.

The new routes that Southwest will start flying after the Wright Amendment goes away in October seemed to have been leaked over the weekend. No updates on what flights or service may be modified or cut to accommodate the new service. We expect all of this to be announced Monday.

Meanwhile, last week was a fairly flat one for the airline sector, with stocks evenly split between winners and losers.

And what did you think about the news that the new ULCC-version of Frontier Airlines is taking over the Z gates (the ones that are easily accessible) at Dulles? We like it.

We talk about all of this and much, much, more in this week’s issue of PlaneBusiness Banter. 


PlaneBusiness Banter Now Posted!

home-typewriter copy 1Hello everyone. Another week. Another issue of PlaneBusiness Banter jammed packed with more in-depth earnings reports that you know what to do with. This week we have full 1Q14 reports on Allegiant Travel, Spirit Airlines, Republic Holdings and SkyWest. We also give you a brief rundown on the recent 1Q14 results reported by IAG, parent of British Airways; Lufthansa, and Air France-KLM.  Short and sweet? All three European airlines saw much improved numbers over those of 1Q13.

Next week we will wrap up 1Q14 earnings with full reports on WestJet and Air Canada. We’ll also take short looks at the earnings from Travelport, Amadeus and Sabre. Ah yes, the GDS folks.

But it’s not all RASM, CASM, and yield this week. Oh no.

I got to crawl around inside one of only four Airbus A350-900s XWB’s last week as the aircraft made its first appearance in the United States. What a beautiful airplane. We’ll even show you a cool close-up of the aircraft’s very sleek and oh-so-sexy curved wingtips. We really liked this airplane. A lot.

We’ll also get you up to date on the Virgin America-Southwest-Delta-DOJ-DOT-Dallas City Council-Love Field-Dallas City Manager Soap Opera. Short and sweet? There was still no decision as of late Friday night. If the city manager is smart, he will allow American to sublease the two gates involved to Virgin. That is the only airline the Department of Transportation has deemed “appropriate” for the gates per the DOJ’s American Airlines/US Airways merger agreement parameters.

If not — then I guess we can get ready for a long legal fight.

It was a strange week on Wall Street last week. While the Dow hit a new all-time high Friday, the Nasdaq continues to struggle. For airline stocks, it was not such a great week. We’ll go over the details.

Finally, as we discussed in last week’s issue, it does appear that JetBlue’s CEO Dave Barger is on his way out. A story that Bloomberg did last week seemed to confirm the Board has made the decision — we’ll give you the details on how we see all this finally playing out.

All of this and much, much more in this week’s quite hefty issue of PlaneBusiness Banter.