Category Archives: Ratty Old Bear Suits and Raging Bulls

PlaneBusiness Banter Now Posted!

home-typewriter copy 1Hello everyone. I hope you all had a wonderful weekend. Us? We were busy little elves this weekend. Earnings Elves. Yes, this week we give our usual thorough treatment to the recent earnings results (and calls) from Southwest Airlines, JetBlue, Hawaiian Airlines and Alaska Air Group. 

Of the four, Alaska clearly outperformed on margins, while Hawaiian posted a loss that was much less than expected, which made analysts happy. Southwest posted good numbers, while JetBlue did not.

Speaking of the Blue Crew, we also talk this week about last Monday’s seismic executive shifts that occurred at JetBlue, just four days after the airline reported anemic 1Q14 earnings.

Rob Maruster, COO, has now left the building, as have three other former VPs, including Jenny Dervin, VP of Corporate Communications. There were a laundry list of job changes announced at the airline, most of which took place on the operational side, although Marty St. George was promoted to SVP Commercial, up from SVP of Marketing and Commercial Strategy. Essentially he took Robin Hayes’ old spot. (Hayes took over as President on Jan. 1).

Lots of things going on at JetBlue. Remember the airline is scheduled to roll out its new Mint trans-con product in the not-too-distant future as well.

Oh, and about Virgin America’s claim the week before that getting the okay from the city of Dallas to take over possession of those two gates at Love Field was a mere formality? We didn’t think so. Last week it was a parade of consulting studies, letters, rebuttals and rebuttals to rebuttals as Southwest Airlines trotted out its study that showed — surprise! — that it should be given the use of the gates. Virgin responded. Southwest responded again. Then Delta Air Lines kept its argument alive about why it should be given the gates. (I’m not sure why Delta continues to fight this fight, as the DOJ has said from the beginning that the gates would be awarded to a “low cost” competitor.

Monday (tomorrow), Sir Richard Branson rides into town in an attempt to lobby, smooze and cajole the locals.

I still think when all is said and done the DOJ will prevail. This means Virgin will get the gates.

But hey this is North Texas. We all know that aviation works in mysterious ways around here. (Did someone say, “Wright Amendment?”)

It was a good week last week for the airline sector, no complaints there.

Energy prices also behaved for the most part last week. Again, no complaints.

Oh, and those Alan Mulally rumors? You know. The ones that say he is going to be the next CEO of United? Get a life guys. It ain’t happenin.

It is a long issue this week. Lots to keep you occupied.

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




PlaneBusiness Banter Now Posted!

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

There is obviously a lot more to say about this week’s issue, but I have a confession to make. I need to go to bed. Yours truly has been fighting a rather serious respiratory infection for almost two weeks, and well, my energy today has finally left the building.

I’ll be back tomorrow with more dish.

In the meantime, go hard boil some eggs or work on your Easter bonnet.

Talk to you tomorrow!


PlaneBusiness Banter Now Posted!

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

Alas, I was supposed to be in Dublin this week, attending the CAPA “Airlines in Transition” Conference, but I came down with a rather nasty respiratory ailment before leaving Phoenix last weekend, and well, here I am. Sitting in the DFW Metromess. Today was day seven of my bout with whatever it is I have (had) and I am happy to report that I finally feel like I have turned the corner.

But in the meantime, my hot date with one of American’s new 777-300s to Heathrow had to bite the dust. Shame. Just a damn shame.

However, this is good news for subscribers, as it gave me plenty of time to write. And it was a busy week.

First, we had more updated guidance from the airlines re: 1Q14 results. We had no real changes this week, but American will come in a bit lower than expected, while Alaska upped its guidance. JetBlue will post a weak quarter, but it still appears that United Airlines will be the only U.S airline to post a loss for 1Q14. The size of the loss is the question, as there is a wide range of analyst estimates out there — even today.

We talk about the significance of the resounding “NO” vote on the proposed pilot contract at Republic Holdings this week.  Meanwhile, both SkyWest and Mesa Air Group got nice shiny new Embraer E-175s last week — the first E-175s for each airline. Mesa will be flying 30 for  United Airlines as United Express; SkyWest will be flying 40.

Meanwhile, out at the Phoenix Sky Harbor International Airline Symposium last week, American Airlines President Scott Kirby said that American should make a decision on who will get the rest of its E-175 flying “shortly.”

I tend to think that means Republic is going to be out of the running, given the resounding “no” vote on the pilot contract.

We talk a lot this week about the Phoenix Sky Harbor International Airline Symposium. And I’ll talk about it even more in next week’s issue.

Here in the Metromess, American Airlines more or less evicted American Eagle, aka Envoy this week. Envoy will be moving its headquarters to an office building in Irving, on the Northeast side of DFW International.

American also announced a series of changes to its product offerings, and some tweaks to its frequent flyer program this week as it seeks to harmonize the operations of American and US Airways.  Actually I thought some of the changes were quite positive, but hard core Flyer Talk types were up in arms over the fact the airline had not given enough notice on some of the changes, and had not been up front about changes to some little used programs that are essentially going away.

In other news, the DOT issued its February Air Travel Consumer Report this week. United once again lagged its peers; Delta pretty much led the major group of four (except in one category) and Southwest/AIrTran continue to struggle. Alaska also turned in a very good month. And no, we won’t talk about the number of cancellations that ExpressJet endured. Or rather, that passengers on ExpressJet endured.

It’s been a cruel, cruel winter.

One airline analyst published a note last Friday in which he makes the case that it’s only a matter of time before the major airlines begin to charge for overhead bin space, as does Frontier Airlines. In this scenario, customers who purchase tickets through an OTA would be forced to pay a fee ($25) to take a rollerboard, or other overhead bin-sized carryall on board. If you purchased a ticket on an airline’s website, you would not be dinged. And of course, top tier flyers wouldn’t have to pay at all.

Is Wolfe Research analyst Hunter Keay nuts or brilliant? Or both?

We give you our take.

It was a wacky week for airline stocks for the week ending April 4 — as shares of Air Canada gained more than 40% — merely because the airline guided to better than expected 1Q14 results. Who says the concept of the airline sector being a trading sector is dead?


Finally, my thanks to Deb McElroy, VP with Airports Council International: North America. She was kind enough to invite me to present the keynote address at the organization’s yearly conference which was held this week here in Dallas. Was very cool to meet the Mayor of Dallas, Mike Rawlings, (who used to be an old advertising man, probably why I liked him) and the new head of ACI, Kevin Burke. Also always nice to see some subscribers in the crowd! (And no one complained about my “Barry White” voice!)

Anyway, you get the picture. We have a lot to talk about in this week’s issue of PlaneBusiness Banter.



PlaneBusiness Banter Now Posted!

home-typewriter copy 1Hello earthlings. We’re coming to you a bit earlier than usual this week. Yes, yours truly is on the road. All good. Just wreaks havoc with the PlaneBusiness Banter  publishing schedule.

After I finish this, I will make my way over to the Westin Kierland in Scottsdale where this year’s Phoenix Sky Harbor International Airline Symposium opens up. Yours truly is moderating a panel this year, so I need to visit with my panel members tonight and make sure we know what the heck we’re going to talk about. Always a good thing.

All kidding aside, I am honored to have been asked to moderate this year. This is always a great industry conference.

Meanwhile, this week’s issue of PBB is now posted. What are we talking about this week? 1Q14 stock performance first and foremost.

It as a very strong quarter for the airline sector — but particularly the U.S. major airlines. We review how everyone did, and then we’ll take a look at some revisions in 1Q14 earnings estimates, and we take a look at Buckingham Research analyst Dan McKenzie’s latest competitive capacity analysis.

For those of you who are due proceeds from the final equity distribution of AAMRQ shares, that will take place on April 8. This last distribution will be the largest of the four — so shareholders of AAL shouldn’t get nervous if the stock price bobbles around a bit after this last distribution.

Meanwhile, we still don’t have one verifiable piece of wreckage from Malaysia Airlines Flight 370.

Of course that has not stopped CNN from continuing its shameless, pitiful, and at times, embarrassing coverage of the missing aircraft.

We have the latest example of that for you as well. We couldn’t resist.

This week Asiana filed a response to the NTSB in regard to its fatal crash at SFO last year. Was interesting to read the airline’s attempt to blame the software in the Boeing 777 jet for the accident. I don’t think so. While it may be the case that use of auto throttle and the auto pilot in the aircraft can be a little confusing, pilots should know how the system works. They should also know when not to land, i.e., when an approach is not stabilized.

But we all know how the official NTSB investigation process works. At this point everyone is trying to jockey for position to minimize potential liability issues.

One accident we have not heard much about from the NTSB is the Southwest Airlines accident at LaGuardia last July. In fact, unlike the Asiana crash, the NTSB has not held a hearing on the accident yet. Emails sent to a press contact at the NTSB this week went unresponded to, in regard to a potential hearing date.

Hey, all this, and much, much, more in this week’s issue of PlaneBusiness Banter. 


PlaneBusiness Banter Now Posted!

home-typewriter copy 1Hello all great friends and fans of the airline industry. It’s that time again. That’s right. This week’s issue of PlaneBusiness Banter is now posted.

This week we pick up where we left off last week with our take on this year’s ISTAT Americas Conference.  Factoid of the week: Bet you didn’t know there is an airline leasing company that only leases one kind of airplane — Airbus A380s. But there is.

Speaking of Airbus, is the manufacturer going to build an A330neo? We’ll tell you what Air Lease founder and CEO Steve Hazy had to say about this. Among other topics.

Meanwhile, it was a busy week in terms of labor pains.

First, pilots at American Eagle voted down the proposed tentative agreement with American Airlines.  We can now all watch as Eagle, aka Envoy, ends up becoming a very stagnant entity as the airline will in all probability move forward with the RFP process involving third party providers regarding new E-Jet flying.

Interestingly, we had been hearing that the vote on the TA between Republic Holdings and its pilots had been trending negatively as well. Both groups were scheduled to announce the results of the votes today.

Eagle did, but the Teamsters, who represent the pilots at Republic posted a note on their website after the Eagle vote went public, saying that voting had been extended until next Friday, as a result of a “high number of replacement ballot requests.”


Meanwhile, strikes by airport workers in Germany are making travel in that country difficult this week and pilots at Lufthansa announced they plan to hold a three day strike against the airline next week — after negotiations between the airline and the pilots union broke down. These negotiations have been going on for more than 2 years.

We have two earnings reports this week to talk about — GOL and Virgin America. GOL posted a loss for 4Q13 and Virgin America posted a profit. How ’bout that?

Look for a Virgin IPO this year.

And what about Etihad? The airline is to failing airlines what Emelda Marcos was to shoes. The airline looks like it may be writing big checks for a stake in both in Air Berlin and maybe…maybe….Alitalia? 

Meanwhile, yours truly was hanging with the big boys in New York last week as I spoke at a meeting of Tzell Travel Group. I shared the platform with Tom Klein, CEO of Sabre, and Ed Bastian, President of Delta Air Lines. Had a blast. Met some great people. Thanks to Jerry Behrens at Tzell for the invite.

Oh, and no, we don’t talk about Malaysian Airlines Flight 370 this week. If you want more speculation, you can watch CNN. 

But while we don’t talk about Malaysian Airlines Flight 370, we do talk about lots of other things in this week’s issue of PlaneBusiness Banter! 


PlaneBusiness Banter Now Posted!

home-typewriter copy 1Hello everyone. Wow. What a day. Just as we posted this week’s issue of PlaneBusiness Banter, new important information has been published concerning the mysterious disappearance of Malaysia Airlines Flight 370.  No surprise that the latest news comes yet again from Jon Ostrower and Andy Pasztor at The Wall Street Journal

Jon and Andy, who have been the ones to break the story on this situation almost all week, just did it again as we published PBB. They have gone with a story in which they report,

“Officials suspect two different systems were shut off after the plane took off last weekend, one shortly after the other, people familiar with the investigation said. About an hour into the flight, the plane’s transponders stopped functioning, making it much more difficult for air-traffic control personnel to track or identify it via radar.

In the ensuing minutes, a second system sent a routine aircraft-monitoring message to a satellite indicating that someone made a manual change in the plane’s heading, veering sharply to the west. Such a turn wouldn’t have been part of the original authorized route programmed in the flight-management computer that controls the autopilot. Those system-monitoring messages are suspected to have been disabled shortly afterward, according to some of these people.”

This news comes after it was Jon and Andy who broke the story that there was evidence the aircraft had deviated from its original course and veered sharply west, after communications ended with civilian authorities.

I’m proud to call Jon a friend.

That’s a long way of saying — if you really want to know what is going on with this situation listen to Jon and Andy when they are on television being interviewed or read their stories. They are working the story like stories should be worked.

Okay, I’ll shut up now.

Speaking of stories, this week a lot of airline CEOs were in New York telling their stories to investors as JP Morgan held their annual airline, transportation, and industrials conference. Unlike years ago, however, they were anything but sob stories.

The biggest news for us out of the conference? No other major airline is guiding to a substantial reduction in revenues as a result of the winter weather cancellations. Except for the one we already knew about — United Airlines. 

Delta Air Lines, in fact, upped some of their guidance. American Airlines says RASM should come in between 2% and 4% as they had already guided.  Southwest said their quarter is still on track.

So the question remains — what’s the problem with United?

Speaking of, this week we welcome back contributing editor Brett Snyder, who returns with yet another Cranky Analysis. This week he looks at the Denver market. We know that Southwest now has the largest market share in the market, but have they been able to snatch any of United’s higher yielding revenue? The answer, and our look at a number of routes out of Denver surprised us.

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

If you will excuse me now, I am off to San Diego for this year’s ISTAT Conference. Can’t wait to see some of our subscribers there. Have a great weekend everyone!


PlaneBusiness Banter Now Posted!

home-typewriter copy 1Good evening everyone. Long day here today, made even longer by the distressing news this evening concerning the Malaysian Airlines 777-200 that has simply disappeared somewhere between Kuala Lumpur and Beijing. Not a good sign when an aircraft such as the 777 is at cruising altitude and just drops off the radar screen. No call for help. No more transponder. No nothing.

Thirty minutes ago Malaysia Airlines Vice President of Operations Control Fuad Sharuji said on CNN’s “AC360”, “At the moment we have no idea where this aircraft is right now.”

I’m sure we’ll know more tomorrow. Er, rather, later today. (It’s already Saturday.)

In the meantime, we have lots to talk about in this week’s issue of PlaneBusiness Banter.  This week we go in-depth to look at the 4Q13 earnings of Republic Holdings. Interesting call. But no surprise that a lot of the call dealt with larger industry issues — not the airline’s results.

Related to the future options for Republic’s regional operations, Friday the American Eagle ALPA MEC did a 180 degree turn and decided it was going to send out the last proposal that was made by American Airlines to the pilots directly — so that they can vote on the proposed deal.

Smart move.

Especially considering the airline, as it said it was going to do, had already sent out RFP’s to a group of regional carriers, including Republic, to operate the 60 Embraer jets promised to the American Eagle pilots if they accepted the proposal presented by the airline.  As you may recall, the ALPA MEC decided not to accept the proposal. Now, American Eagle pilots will have an opportunity to vote on the proposal. As it should be.

The boys at USAPA were up to their old tricks again this week — filing law suits and denying jumpseats to American Airlines‘ pilots. It’s that Real Men of Genius gene. Can’t be altered.

We talk about all of that, and the joint letter that the president of APA and USAPA sent out on Friday in regard to both the seniority squabble and the unfortunate jumpseat incidents.

Boeing apparently has another problem with its problem child — the 787. Jon Ostrower had the story first Friday in the Wall Street Journal. Wings. Cracks. We’ll update you on all that.

We also review a lot of earnings this week — not just Republic. We talk about the recent results from IAG, parent of British Airways; Travelport; Amadeus; Embraer, and Volaris. 

Oh, and how could we forget Delta Air Lines. The airline rolled out its new award chart this week for its revised SkyMiles program it announced the week before. You may recall the airline said it was going to do this “later this year.” Yes, well, that didn’t sit well with a lot of people. I have to say, I agree. The airline should have rolled out everything at once.

But the award chart really doesn’t answer a lot of questions, including those dealing with international travel. In addition, the airline has not said how it is going to increase or decrease award availability in each tier of the new program.

So — still very much a work in progress.

All of this and much, much 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 take a deep dive in the recent earnings calls at both WestJet and Hawaiian Airlines. We also give you earnings summaries for SkyWest and Air Canada. More on them in next week’s issue.

But clearly the big story this week concerns pilots. Regional airline pilots. Mainline airline pilots.

With the roll out of the new FAR 117 regs the duty regs are not the problem — it is the minimum 1500 hours needed in hand before a regional can hire a pilot that is the problem. The impact of a change in regs that was intended to improve the safety of regional airline flying has cast a very ominous light on a system that has been broken for years.

Layered over this is the news this week that the American Eagle ALPA MEC has refused to accept the tentative agreement put forth by American Airlines. The deal will not go to the general membership for a vote.

What’s next at Eagle and American? We talk about that more this week.

The company had already warned that a turn down of the deal would lead to American cutting back on the flying at the airline to the extent that American Eagle would become “Comair II.”

The American Eagle MEC pilots have drawn the line in the sand, saying they are not going to make any more concessions, and there are other jobs to be found in the industry.

Pulling back up to the 35,000 foot level, as I said previously, could the FAR 117 regs end up finally bringing massive change to a business model that never has been based on sound business practices, i.e., the regional airlines provide feeder service to the mainline airlines at low cost?

It’s a serious problem.

In other news, the airline sector enjoyed a pretty good week last week, Morgan Stanley analyst John Godyn ponders whether airlines need to hedge fuel or not (subscribers know where I stand on this) and Norwegian Air just obtained its operating license for its international operation in Ireland.

Then there are the December DOT numbers. As we alerted PBB subscribers to last month, Southwest Airlines suffered a systemwide operational meltdown in December. The DOT report for December merely affirmed this. Meanwhile, Delta Air Lines continued to lead the big boys pretty much across the four major DOT metrics in December, as well as for 2013.

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



PlaneBusiness Banter Now Posted!

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

This week we have a 51-page analysis of the recent American Airlines earnings call. Read it. You’ll learn a lot about how to do a merger in this industry.

We also talk about the recent 4Q13 earnings numbers from JetBlue and Allegiant. 

Short and sweet? While I love to fly on JetBlue, as an investment the airline leaves a lot to be desired. CAPEX and costs are both looking to put intense pressure on margins in 2014.

In addition, pilots at the airline, who just received a 20% pay raise, filed authorization cards Monday with the NMB for a representational election with ALPA.  (But you’ll hear nothing about this in the earnings call!)

As for Allegiant, there’s no wonder that shares of the airline dropped sharply after the airline’s call. It was, as one analyst put it, “horrible.” We’ll give you the details.

Last week was not a particularly good one for the airline sector, as most stocks we track lost ground. But one stock picked up a double-digit gain. That stock was American Airlines, AAL. It was up 10% for the week.

United Airlines announced over the weekend that it was shutting down its Cleveland hub. While most of the mainline service will remain, all the regional flights will be eliminated. Not surprised. United only had to keep the hub in operation for two years after the merger before it could make the decision that it was not financially viable.  I doubt the hub ever hit any of the pre-agreed upon  financial goals.

This move, according to Imperial Capital analyst Bob McAdoo will not only be good for United, but for American and Delta as well. We explain why.

Some of us AvGeeks also had fun Thursday afternoon. Led by Leslie Scott at Delta Air Lines and John Walton at Route Happy, a group of aviation nutcases began a Twitter conversation that started out as an airline geek version of Upworthy or Buzz Feed headlines. Hashtag is #buzzfeedthesky. Hopefully we can keep this going. It was a lot of fun. Especially when we morphed into AvGeek pick up lines. Unfortunately I was in final edits for PBB, so I didn’t get to contribute that much this afternoon.

All of this and much, much more in this mega-earnings edition of PlaneBusiness Banter. 

PlaneBusiness Banter Now Posted!

dfw Hello everyone! Yes, I come to you this afternoon from a not-so-lovely part of the world. Dallas Ft. Worth is now “entombed” as one of our subscribers put it today under about 5-6 inches of ice and sleet. The airport is a holding pen for tired passengers, most of whom aren’t going anywhere. As for me, I am going to consider myself lucky if I get out of the driveway and down the road to the big hoopla celebration Monday morning as the new American Airlines Group takes to the skies. You see, temperatures are just going to get lower all weekend. Not higher. Yep. It’s Super Bowl Week all over again. Solid as a rock out there.

Our apologies for being a day late this week. But the WWH lost power yesterday as a result of a tree falling across some power lines down the street. We were finally brought back on line earlier today. Yes, it’s been a little hectic around here.

Aside from this less-than-desirable state of affairs that Mother Nature has decided to throw in our direction, this week in PBB we are talking all kinds of things. First, there were some serious management shifts, departures, and new titles announced at United Airlines yesterday and today. We’ll tell you who is out, who is still in, and who had some responsibilities altered.  Oh, and yes, I think the person who owned the dog that ate the demand forecast in the third quarter? Yeah, I think he’s left the building.

Meanwhile, we update you on the latest news concerning the slot wars. You know — the fight for the slots that American and US Airways have had to cough up as part of their deal with the Department of Justice. Looks like Virgin America and Southwest are the winners at LGA — but what about DCA? Better yet, the catfight for American’s gates at Love Field just escalated up a couple of notches this week as well. Delta has already gone public with its desire to keep the gates its leases from American there. Now Southwest Airlines says it wants them.

Let the fight commence.

It was a good week for airline stocks last week. We’ll update you on all that. Energy prices have been on a bit of an up and down run the last week or so though. We’ll explain why that is the case as well.

Finally, we give you a peek at the Business Travel Hall of Fame Dinner we attended this week. Former American Airlines Chairman and CEO Robert Crandall was certainly making the rounds of the event — or should I say he was making the most of the fact that neither Gordon Bethune nor Herb Kelleher was there. It was a great night. Nothing like being at the St. Regis in New York for Christmas.

All this, and much more, including a profit warning from Qantas, Southwest’s new route cuts, and a great quote of the week, in this week’s edition of PlaneBusiness Banter.