Monthly Archives: November 2006

And They Say Politics is Rough…

Yes, well, “they” have obviously never been involved in the airline industry.

As many of you know, a group of Aloha and Hawaiian Airlines’ employees recently started a website called H.E.R.O. This stands for Hawaiian airline Employees Repelling Ornstein.

Yes, that would be Jonathan Ornstein, as in the CEO of Mesa Air Group (MESA:Nasdaq) which owns “go!” (Or as we have dubbed the effort, “Hawaii Five-O”)

A couple of weeks ago the H.E.R.O. site went black. First there was a request for some pro bono legal help posted on the site, and then there was a message on the site saying it would be back, after it was sold to new owners.

What was going on?

I’m still not sure, but here’s my hunch. I suspect that the legal eagles at Mesa sent the folks behind the site a “cease and desist” threat of some type.

So after the ownership of the site was changed from private hands, and apparently some legal eagles working for the employees deemed the content on the site to be non-actionable — the site is now back up — and the group doesn’t seem to have missed a beat. As they continue to beat up on Mesa and its fearless leader.

In fact, there is a new offering on the site that might be just the thing for an airline fan’s stocking this Christmas.

You can access the bogus Amazon sales page for the parody review of Jonathan’s new book, “First to Worst” here.

Firsttoworst

I have to admit. I don’t know where they found that picture of JO, but it has to be one of the worst pictures of anyone I’ve ever seen.

These guys at H.E.R.O. have a real future in politics.

FedEx Walks Away from Airbus A380 Order; Boeing Snares Order for 15 777s

Fedex

Now this is big news.

Today FedEx (FDX:NYSE) announced it was buying 15 Boeing 777 freighters — and canceling its order of 10 Airbus A380 aircraft.

FedEx said its agreement with Boeing also gives it options to purchase an additional 15 aircraft. It expects to take delivery of four of the 777 aircraft in 2009, eight in 2010 and the remaining three in 2011.

This is huge, as if there were two companies that were thought to be willing to wait for the A380’s delays more than most, it was UPS and FedEx.

Not FedEx. Can UPS be far behind?



Given the closeness with which
FedEx had worked with Airbus in the development of the freighter version of the aircraft — and the fact that FedEx is walking away from it — you have to assume this move signals a belief on the part of FedEx that the aircraft simply is never going to do what it needs to do — in terms of freighter performance.

Bah Humbug

Yours truly is suffering through the first cold of the season. A fact that was probably not helped by my sitting outside in 40 degree weather late last week watching a high school football game.

But hey, it was Texas high school football. It was worth it.

I had a great time.

I’m just paying for it now. Sniff, sniff. Sneeze. Sneeze.

I would like to thank the PBB subscriber who shall remain nameless who sent me the text message this morning that read simply, “Go Vols.”

Yes, well you can chow down on two day-old dog food too.

Yep. Thanks to the typically inconsistent, but this time successful in the end, playing of LSU’s offense, the UT Vols are no longer in the hunt for any meaningful end of season SEC championship effort. LSU beat Tennessee Saturday night in front of more than 106,000 Big Orange faithful. Now Tennessee’s just playing for style points to see what bowl game it can snare.

A fact at least three Vol players must have been quite aware of Saturday night, as they proceeded to get arrested in Knoxville for drunk and disorderly behavior. “Oh hell, the season’s over, who cares?”

However, on the pro side, it was a great weekend — as the Bless You Boys, aka New Orleans Saints, beat up on Tampa Bay. The Saints are now 6-2 in the NFC South, enough for first place.

Marques Colston — Rookie of the Year. No question.

Okay, enough pigskin pokes.

Leading the airline news today is the fact that the AMFA strike against Northwest Airlines is now officially over. I say “officially” because we all know Northwest was successful in breaking the union over this dispute a long time ago — as the airline continued to fly using mechanics it had hired, and eventually, many of its own mechanics who crossed the union picket lines.

It was announced today that 72% of eligible workers voted to accept the tentative agreement that the airline and the union recently negotiated. The agreement settles the strike legally — something Northwest needed as it proceeds through its bankruptcy process — and it will give some small amount of benefits to those mechanics who remain on strike against the airline. While their old jobs are not part of the deal — mechanics who accept “layoff” status will be able to re-apply to Northwest for a job.

As I have said before — AMFA leadership totally blew this one.

Before I wander off to find the Kleenex box, one last mention. It was announced today that Southwest Airlines won the Business Travel News Annual Airline Survey for 2006.

Blue Ribbon

Now I usually don’t make much of such contests, awards, etc.

But I think this one is a fairly nice grab for the folks at Southwest (LUV:NYSE)as its the first time in the nine-year history of the award that neither Continental (CAL:NYSE) or American (AMR:NYSE)took top honors.

Or as BTN said, “For the first time, a low-cost domestic carrier that does not offer corporate contracts, an international network, a business class cabin or global distribution system participation drew the highest marks in an annual survey of executives responsible for purchasing corporate airline services.”

There was a rather amusing quote from American Airlines’ vice-president Frank Morogiello in the BTN announcement. “I would think managed travel programs would give Southwest the worst ranking: They don’t offer corporate discounts, they don’t run agency programs—they’re totally against a managed travel program. You can’t fail if you don’t have a corporate contract that you have to do a review on, you can’t fail if you don’t have an agency program that you win or lose, and you can’t fail if you don’t offer amenities.”

Ah, is it just me or does Mr. Morogiello sound like he is living in the past? Who needs corporate discounts when your base fares are lower to begin with Frank? Oh, and what amenities does American offer these days? Having recently flown first class on American, I can’t say I was overly impressed by the experience. And I’m still trying to think about what amenities I received, as food was certainly not one of them.

As BTN explained in their release, “However, for buyers responding to this year’s survey, price was king. In response to an open-ended question about the primary way their preferred carriers in the next year could keep their business, respondents overwhelmingly asked for more favorable pricing.”

The release included one excerpt from a participant to make its point, “Southwest has made us feel like they care and value our business, even though we are a small account.”

Let’s look at these reasons. Low price and “they made us feel like they care and value our business.”

Mr. Morogiello, did you write these reasons down? Do we need to explain how this works any further?

Okay, we’re off on a Kleenex hunt.

Talk to you guys later.

PBB Will Be Posted on Friday This Week

Home-Typewriter Copy-3

A reminder to PlaneBusiness Banter readers. This week we are posting PBB on Friday.

Just a necessity because of my being on the road this week and a somewhat fractured schedule. No biggie.

Now, go get ready for this week’s episode of Grey’s Anatomy.

It Must Be Thursday

Hello everyone.

It’s Thursday and I’m in Dallas working on this week’s issue of PBB.

Yesterday I spent most of the day at Southwest Airlines — as part of their media day activities. I wish I could say there was some interesting news to report from this year’s program, but there really wasn’t.

About the most interesting thing to report is that this year they combined the analyst/institutional investor day with media day, which provided for some interesting conversations at lunch.

Overheard at our table:

Reporter: And what investment firm are you with?

Investor: Blah Blah and Sons. You’ve never heard of us.

Reporter: Oh. Are you based in New York?

Investor: Yes, but we never talk to the press. We make it a point to stay “under the radar.” We don’t want any publicity.

Reporter: Oh.

End of conversation.

Unfortunately we really had little time just to “socialize” with folks who were there. I saw Gary Chase, I saw Betsy Snyder, I saw Jamie Baker, I saw Mike Linenberg, I saw Kevin Crissey, all the rest of the analyst community, not to mention all the media folks who were also there. But there was little time to talk to anyone. I had my hands full with my pizza and my ice tea looking for a place to sit at lunch when I saw Betsy, for example. Never got a chance to track her down before we were all shepherded into the next session with Southwest CEO Gary Kelly.

Shame. Would have been nice if we could have had more schmooze time. Both with Southwest execs and with the investor/analyst folks, since they were there. That type of informal contact, whether it be in the form of a cocktail party, or dinner, is a huge reason these types of events are usually worth attending.