Category Archives: Ratty Old Bear Suits and Raging Bulls

PlaneBusiness Banter Now Posted!

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Hello everyone! This week’s issue of PlaneBusiness Banter is now posted!
This week we offer up a varied mix of things for you to chew on including in-depth 4Q earnings reports on SkyWest and Spirit Airlines.
Long and the short? Both airlines turned in good numbers for the fourth quarter, but guidance for both airlines going into 2013 looks even better. No surprise that shares of both airlines took the top spots last week for the sector.
On the airline distribution front, we talk this week about a new API that Farelogix just rolled out that we think is pretty cool. The product will allow airlines to more closely control the point of sale and merchandise its product more efficiently. In addition, the API works nicely with existing platforms and whatever GDS company an airline is currently using. None of this “either/or” stuff.
Could United Airlines be the first airline to implement it? We think so.
Trust me. We’re all for letting airlines do a better job marketing their product. Notice I didn’t say …”seat.” That’s because today, a seat on one airline can be much different than a seat on another airline. But the way those seats are sold and marketed hasn’t changed much since the dark ages.
We also update you on the latest AMR/US Airways transition news, and we talk about how this nasty and very stupid “sequestration” fight in Washington could negatively affect the airline industry — and its passengers.
Don’t get me started.
All this, along with much more, including and lots and lots of letters — in this week’s issue of PlaneBusiness Banter.

PlaneBusiness Banter Now Posted!

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Good evening earthlings!

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

Three guesses what we are talking about this week? (The first two don’t count.)

That’s right — the American Airlines/US Airways merger.

We’ll give you our take on what was announced, what was said that we don’t think is necessarily true, and why we think it’s still a great move not only for American Airlines and US Airways but for the U.S. domestic airline industry in general.

Oh, we talk about the situation at Boeing too. Anyone want to bet as to whether the FAA allows Boeing to put in a “fix” to the battery problem while investigators here and in Japan continue working to find reasons for the two battery issues that occurred in January?

I don’t think the FAA will do it, but apparently Boeing is going to make the pitch on Friday that a different battery design will prevent such things from happening again.

We talk a little bit about earnings this week, as we give a short and sweet summary on the recent results announced by both SkyWest and Spirit. More on the results from both airlines in next week’s issue.

We also look at the pre-announced earnings from Lufthansa.

But the most surprising news this week concerns the bankrupt shares of AMR, parent of American Airlines. As was announced last week, equity shareholders are going to receive a return on their equity investment. Late Wednesday night, JP Morgan analyst Jamie Baker issued a note in which he initiated coverage on the shares again. We’ll tell you why he thinks investors might want to take a look at the shares.

I know. Who would have thought?

Pigs have flown.

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

Errant Thoughts On The US Airways and American Airlines Merger

Funny.

Last week I tweeted on Thursday that I would post an update on the American Airlines/US Airways merger on PlaneBuzz.

But on Friday, after having attended the airlines’ press conference in the Admiral’s Club in Terminal D at Dallas Ft. Worth Airport, and after having pontificated on the PBS Newshour and other media outlets about it all, I came to the conclusion that there really was not a lot more to say that had not already been said.

Or as US Airways Chairman and CEO Doug Parker said at the conclusion of last week’s press conference, “Thank you all for coming today, although I’m not sure why you needed to, as you’ve been reporting everything we announced for weeks.”
For PlaneBusiness Banter subscribers, it’s been more than a year.

Since last week however, there have been a few thoughts that have crossed my mind and I thought I’d take the time to share them with you today.

1. I don’t have a problem with American Chairman and CEO Tom Horton’s $20 million “heave-ho” package. We’ve seen other CEOs in this industry walk away with a heck of a lot more. The most obvious example would be former United Airlines Chairman and CEO Glenn Tilton. Then again, former US Airways‘ Chairman and CEO Stephen Wolf and President Rakesh Gangwal had to back up a Brinks truck to haul their “bye bye” packages away.

2. I do have a problem with Tom Horton staying through the first AMR board meeting in 2014. That’s too long. He needs to leave the building as soon as the deal closes. I’ve heard too many less-than-positive things connected to the recent “overstay” of Glenn Tilton at United Airlines. Tom needs to take his $20 million and go.

3. American Airlines’ employees need to stop trying to figure out what the new regime will or will not do. The first agenda for Doug Parker is to put together the management team that will lead the new airline. After that, this group will begin to put together the complete roadmap in terms of the transition process. Until then anything and everything else is pure speculation. Period.

4. But by far, the biggest question I have been asked following last week’s activities is the same one that was asked by JP Morgan’s debt analyst Mark Streeter on the analyst call that was held prior to the press conference last Thursday. And the question was asked in the press conference as well. That question involves whether or not the folks from Tempe plan to do anything about the “new” American livery.

While you aren’t going to hear Doug Parker or Scott Kirby say so anytime soon — it is my belief the new livery is a dead duck. It is going to go away.

Then again, because it is such a shining testament to the arrogance, tone deafness, and inept management ability of the current management team at American Airlines, maybe it needs to stay around awhile.

By the way, yes, I did get to see the new livery in person last week at the press conference. The Boeing 777-300 in the new livery was parked outside the Admiral’s Club on the concrete. Verdict: It’s worse in person. It is as bad as everyone has told me who had already seen it in person. The grey is flat and dull. It is not silvery. Then there is that tail.

Put it all together and you get an Army transport plane with a cockatiel tail thrown on the rear end. The US Airways’ aircraft sitting next to it on the concrete looked positively stately and elegant by comparison.

I’ll be talking more about the livery issue in this week’s issue of PlaneBusiness Banter. And why we aren’t going to hear much from Tempe on the subject any time soon.

Then again, we haven’t even started on the rumors American wants to roll out grey uniforms for its pilots. Would make sense. Would go right along with the Greyhound-ish logo that is supposed to represent an Eagle. So that makes perfect sense to me.

Ahem.

Until then — Happy Presidents’ Day everyone! Tomorrow it’s back to work for us as we return to the Worldwide Headquarters. May you all enjoy the rest of your Monday!

PlaneBusiness Banter Now Posted!

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Greetings earthlings!

This week’s mega-earnings issue of PlaneBusiness Banter is now posted. This week we take an in-depth look at the recent earnings results from Hawaiian Holdings, Allegiant Travel Company, JetBlue, and Alaska Air Group.

We also take a look at the latest capacity analysis by analyst Dan McKenzie with Buckingham Research; we take a look at the latest news concerning Boeing’s little problem with the 787; we look at Imperial Capital analyst Bob McAdoo’s latest comments on United Airlines; we have a couple of reader letters we found interesting this week; and finally, yes, without further ado, we talk about the American/US Airways merger.

You’ve all read the headlines. You’ve all heard the escalating chatter this week. Yes, it does appear that we will hear the details of a proposed merger between US Airways and American Airlines next week. Tuesday or Wednesday to be exact.

It’s about to get really busy around here.

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

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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Hello everyone! It’s that time again. This week’s issue of PlaneBusiness Banter is now posted.

Fourth quarter and year-end earnings reports began to roll out this week, as Delta Air Lines reported on Tuesday and US Airways reported record breaking results on Wednesday.

The two airlines continue to lead the major U.S. airlines in any number of financial metrics. Looking forward, both airlines also gave analysts good guidance for 1Q13.

As we usually do, we will have full earnings call reviews of US Airways and Delta Air Lines in next week’s issue. We will also cover the results from Southwest Airlines and United Airlines — both of whom are on tap for tomorrow.

In other news, we update subscribers on the latest news concerning the battery problems with the Boeing 787 that have kept all of the aircraft grounded. The NTSB is scheduled to hold a press conference Thursday, but the latest news late Wednesday is that there was damage to all of the cells in the battery that caught fire on the JAL aircraft when it was parked in Boston.

Boeing’s not happy.

But neither are Boeing’s customers.

Meanwhile those planes aren’t going anywhere until the reason for the problems are found and the problems are solved.

American Airlines? Oh, yes. American decided to forge ahead and roll-out a new livery and branding effort last week. I talk a great deal this week both about what it says that management at the airline decided to do this — at this time. And how god awful the new design is. Or as the article in Vanity Fair titled its story on the new livery, “Something Lousy in the Air: Analyzing American Airlines‘ Disastrous Redesign.”

Needless to say, the airline failed on all fronts.

We also update you on our latest merger timetable — and I remind all of the stakeholders in this bankruptcy of what will happen if the current management team at the airline manages to kill a merger in some form or fashion. But I am not the only one sounding this warning. So did a Wall Street analyst last week.

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

PlaneBusiness Banter Now Posted!

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Good evening sports fans, airline fans, and Boeing 787 meltdown fans.

No, it has not been a good evening for the 787, as both Japan Air Lines and ANA have now grounded their 787 fleets after yet another “battery” incident that necessitated an emergency landing by an ANA aircraft earlier this evening in Japan.

Before this latest development, we had already devoted a fair amount of ink this week to the Boeing 787 problems — including the investigation into the systems and design of the aircraft, which was announced Friday by the FAA.

We also update readers on the NTSB investigation of the fire last week on the Japan Airlines 787 in Boston. And no, those pictures of the burned out Lithium battery are enough to scare the you-know-what out of you. Especially when you factor in the news that it apparently took 40 minutes for fire fighters to finally put out the fire.

Other than continued scary moments with the 787, we also talk a bit this week about the American/US Airways merger — which seems to be inching forward, although we hear the diehards at AMR refuse to give up on the misguided idea that a standalone deal would be preferable, so an announcement may not be as close as we had estimated.
Some people just refuse to accept the fact the world has changed.

Shame.

Meanwhile we all know how this works. Giving up valuable turf is never easy.
Just ask the guys at APA who are obsessed with what their seniority number is going to be. Nothing else matters.

On the international front, Alitalia needs money again, and Kingfisher continues to operate. Kind of.

Meanwhile, German authorities say that Ryanair has been cheating it out of lots of money, by under-reporting landing weights. This one should be interesting to see how it plays out.

We have the November DOT Air Travel Consumer Report this week, plus December traffic and RASM estimates (what the hell happened to Spirit in the fourth quarter, speaking of RASM) and we tell you why we think 2013 is going to be one heck of a good year for the industry.

All this and more — 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. I know, long time no see. Or hear.

I was originally going to publish our last issue for the year late last week anyway, as a result of both Delta Air Lines and Southwest Airlines issuing updated 2013 guidance to investors last week.

But as Friday morning rolled around, and I began to put together the information Southwest had issued, the Twitter feed began to go nuts with reports of a shooting at a school in Connecticut.

It didn’t take too long before it was clear I was not going to publish PlaneBusiness Banter on Friday.

So, here we are.

This week we have a quite extensive end-of-year issue of PlaneBusiness Banter to share with you as we cover the news of the Delta/Virgin Atlantic proposed JV; we give you our take on the announced (and some not announced) changes in the management structure at United Airlines; we discuss the latest problems with the Boeing 787; we talk about how the proposed valuation of the American Airlines/US Airways deal could portend a rather nice jump in the price of US Airways stock; we talk about just what is going on with the American Airlines/US Airways merger discussions; we let you know how badly Sandy impacted the U.S. airline industry’s operational performance in October, and we give you the details of what both Delta Air Lines and Southwest Airlines told investors and analysts last week.

Oh, and yes, I was in New York last week as well. I presented at the BTN Corporate Travel Management Conference and I also attended the BTN Hall of Fame dinner. Great time to be in New York. It was great to see Bob Crandall, Herb Kelleher, Gordon Bethune, and a who’s who of the corporate travel community at the St. Regis.

But that was then. This is now.

Now it is time for us to take our usual holiday hiatus. A trip to see PlaneDad is on the agenda, as well as taking the time to reach out to those people who were an important part of my 2012.

Those are just some of the things I’ll be doing the next couple of weeks.

Oh, and I point subscribers this week to a great recipe for potato latkes — compliments of a dear friend and spectacular artist, Sandy Sallin.

Just because I am in the holiday spirit, I’ll share the link with you as well! These things really do rock!

One final note. If something dramatic develops in regard to the US Airways/American Airlines merger, I will check in here. I’ll be hanging out over on Twitter as well. Handle is easy to remember: @planebusiness.

Have a great holiday everyone!

Talk to you again next year!

PlaneBusiness Banter Now Posted!

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Good evening everyone.

What a lovely birthday today has been. Even though I have been slaving over a hot issue of PlaneBusiness Banter all day. Tomorrow I shall celebrate properly.

In this week’s issue we talk about what may be the next big deal in the U.S. airline industry. No, I’m not talking about the anticipated merger between US Airways and bankrupt American Airlines. (Although we obviously talk about that again this week as usual!)

No, I’m talking about the reports that say a deal that would see Delta Air Lines purchase Singapore Airlines’ stake in Virgin Atlantic is …back on.

Astute observers of the industry may recall that rumors about this same deal were hot and heavy about two years ago. But from all reports at the time, Sir Richard had an overly inflated idea of how much his prized possession was worth in terms of a “branding” fee.

Yes, well, times change.

As long as Delta doesn’t overpay for the stake, I have no problem with the deal. It would give Delta a much better presence at Heathrow, which it needs to keep its top tier corporate travel clients happy.

The big news closer to home is the pilot contract vote at American Airlines. On Friday, it will all be over, except for the expected screaming and yelling that we anticipate will occur no matter which way the vote goes. And yes, I still say it is too close to call. We’ll see.

Voting is now underway on the United Airlines’ ALPA tentative agreement as well.

I’m sure you all saw that AMR has asked to extend its exclusivity period during which it can present its restructuring plan to the bankruptcy court. No surprise. Considering that not much can be done in December anyway, and considering that the UCC, American, and US Airways are clearly working to put together a merger proposal — this is nothing to get excited about. It does, however, mean that a “merger announcement” has probably been pushed back a bit from what I had originally estimated.

So no hostile bids on the horizon. At least not yet.

Lufthansa finally decided it had best look for a partner to expand its Asian access. Guess who it is?

A merger between Qatar and Emirates? According to Qatar’s CEO, it almost happened.

The situation at Iberia is a mess. IAG has sued the pilot union. British Airways probably wishes it had never gotten involved with Iberia in the first place. Iberia has said it needs to cut 4500 jobs. Meanwhile, employees at Iberia vote to hold a series of strikes later this month.

Merry Friggin’ Christmas!

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