No surprise here. Another heavy earnings week (we’re playing catch-up with the overflow from last week) means another Friday posting for PlaneBusiness Banter subscribers. Yee haw. Guess this means we’ll get to see what happens in the market tomorrow as well before we post this week. Can’t wait.
Monthly Archives: August 2007
Final Market Numbers: Dow Drops 387 Points
The Dow ended the day down 387.18 points, with a hefty chunk of that coming in the last 7 minutes of trading. And yes, curbs were in place.
As you can see, airline stocks had a pretty rough day, with a very few exceptions.
Technorati Tags: airline stocks, airlines, wall street
Subprime Frenzy Takes Street for a Wild Ride
‘We are not quite at the panic stage yet, but this is beyond jitters.’
— Martin Slaney, GFT Global
A wild day on Wall Street today as the fallout from the artificially-propped up mortgage market continues to unwind. And it’s not pretty.
According to MarketWatch, “Black Mesa Capital, a hedge fund firm that uses computer models to track down investment ideas, has told investors that at least one very large hedge fund or investment bank is liquidating “massive” trading portfolios, according to a letter the Santa Fe, NM-based firm sent to investors on Wednesday.That’s causing disruptions and triggering big losses among other so-called market-neutral hedge funds, Black Mesa said in its letter, a copy of which was obtained by MarketWatch on Thursday.”Clearly, something is amiss in the markets that few in our strategy, if anyone, have experienced before,” Black Mesa’s managers Dave DeMers and Jonathan Spring wrote. DeMers declined to comment on Thursday.”
Oh, let me go back and find those comments from economists and other industry analysts from just a few months ago — saying that the “housing mortgage problem was nothing to worry about.”
Right. Yep. Sure. Okay.
This news comes after BNP Paribas, one of the largest banks in France, said this morning that it will stop valuing three of its funds and is suspending investor withdrawals after U.S. subprime-mortgage woes led to the “complete evaporation of liquidity.”
Don’t you just love Wall Street “speak?” The “complete evaporation of liquidity.”
That one deserves a gold star.
Anyway, yep, it’s a tense market out there today. At last look, the DJIA is down more than 300 points. Let’s see what the last hour brings.
Oh — and the price of oil? Closed at $71.50 today.
Airline stocks? A sea of red numbers, for the exception of AirTran, JetBlue, and Alaska Air Group.
Tickers: (NYSE:AAI), (Nasdaq:JBLU), (NYSE:ALK)
Technorati Tags: airline stocks, AirTran, Alaska Airlines, BNP Paribas, hedge funds, jetBlue, wall street
‘Nuf Said
Technorati Tags: Barry Bonds
Airlines and Presidential Candidates
If any of you watched the AFL-CIO debate with the Democratic candidates for President last night, you know that the most riveting part of the hour and a half came not from a candidate, but from a disabled retired steel worker, who used to work for a now bankrupt steel company. He has seen his pension shredded, and as he said, he cannot now afford health insurance for his wife of 36 years. The two of them can barely afford insurance for him. Steve Skvara stood in line, with the help of arm braces, to ask the candidates a question. What’s wrong with America and what will you do to change it?
His comments hit directly on the issue of companies wiping out employee pensions and retiree healthcare benefits in bankruptcy, disproportionate CEO pay versus that of employees, and other such issues that also loom huge in this industry.
One of our airline buds dropped us a note tonight, noting that he was shocked to hear a Republican candidate for the Presidency pick up Mr. Skvara’s reasoning on an appearance on “Hardball” tonight. But of more interest to those of us in the airline industry — it’s the first time I’ve heard any Presidential candidate mention the airline industry in any direct way. And his comments were not kind.
The candidate? Mike Huckabee.
The youtube clip is here.
Technorati Tags: airline CEOs, airline unions, airlines, Overpaid CEOs, presidential candidates
And the Rains Came…But Virgin America Finally Takes Off
Not a very auspicious start to Virgin America’s appearance on the domestic airline scene this morning, as bad weather in the New York area caused more than a few problems for the airline. First, weather in the New York area was not just bad, it was horrid, with subways and train service suspended because of flood waters.
Cable comedian Stephen Colbert, who was supposed to be on the first flight from JFK to SFO apparently spent about 4.5 hours in a car, trying to get to JFK before he gave up and went back to his office.
Not surprisingly, the first Virgin flight was late in taking off.
But in a scene that must have given the DOT heartburn out the wazoo, Sir Richard Branson was the star of the show — as the airline held its kick-off festivities. Why? Because Fred Reid, Virgin America CEO, could not get into New York because of the weather.
Ah, the irony.
You better believe Sir Richard loved it. All of it. Especially those mimosas being served to those in attendance.
(Photo courtesy of Jaunted)
Technorati Tags: airlines, puppy, Richard Branson, Stephen Colbert, virgin america
Big Day Tomorrow for Virgin America
Anyone flying Virgin America tomorrow? Let us know about your flight experiences.
Oh, and yes, apparently the final approvals for the airline to fly tomorrow just came in this afternoon. Whew. Talk about cutting it close.
Meanwhile, the AFA-CWA, which represents 55,000 flight attendants in the U.S. said it was filing preliminary court papers in San Francisco today to challenge the U.S. government’s approval of Virgin America.
AFA spokesman William McGlashen (Hey there Bill) said Virgin America had “circumvented” the rules on domestic control – a precedent that could threaten American aviation jobs, according to the challenge.
“We strongly believe that to protect our members, these laws need to be upheld,” he said. “It is ultimately, we think, a job security issue.”
He added: “We can’t allow our laws to be circumvented and we can’t allow our jobs to be threatened.”
Technorati Tags: airlines, airline unions, virgin america
I Want Jeff Potter’s New Job
Well, the cat’s outta the bag. And it’s a very nice Dolce and Gabbana bag at that.
Instead of going crazy running an airline, Frontier CEO Jeff Potter is going to leave the company to become CEO of Denver-based Exclusive Resorts, a privately held company that leases out luxury homes to wealthy vacationers. Financed by former America Online executive Steve Case, Exclusive Resorts owns $1 billion worth of luxury residences in 40 of the world’s top vacation destinations.
You can read more about Jeff’s nice new gig here.
Ticker: Nasdaq: FRNT
Technorati Tags: airlines, Frontier Airlines
ExpressJet Arbitration Decision Reels Regional Airline Stocks
In case you are wondering why stocks of regional airline stocks took a nosedive Monday — the answer is pretty simple. But it’s not one that the managements of these airlines like to admit. That answer is this — prices paid to these airlines to provide services to the major airlines are going to continue to decline.
As regular readers of PBB know, I have not been a keen fan on investing in this particular subset of the sector for years. Why? Because the writing was on the wall. Major airlines were not going to sit idly by and watch regional airlines continue to rack up profits — while the major airlines themselves continued to post losses.
As a result — the regionals have been under more pressure than ever to perform as efficiently as possible. But — at the beck and call of their major airline partners. And at lower reimbursement levels.
Not a business plan I particularly like.
Last week, the arbitrator who was handling the case between Continental Airlines and ExpressJet over the issue of contract payments ruled — and ExpressJet lost some $14 million in compensation as a result of the decision.
While $14 million is not that much in the bigger scheme of things — it does reflect what is happening with the regional sector as a whole.
Investors took the news as it hit Monday and ran with it — right out the door with regional airline shares. Not one regional airline stock was immune from the sell-off. Today, results are a bit mixed, with some stocks back to where they were (more or less) before the news hit, and some still trading lower.
Coupled with the increasing issue of trying to hire and keep flight crews, increased pressure from major airline partners to become more efficient, and with regional airlines taking the brunt of much of this summer’s delay problems — no, it’s not a business plan that looks particularly attractive right now.
Technorati Tags: airline stocks, airlines, Continental Airlines, ExpressJet, regional airlines
For All of Us Web Warriors Out There
A story yesterday in the Washington Post talked about how the idea of forming a “union” for bloggers had been tossed around at this year’s Daily Kos convention. While some media outlets took the topic and approached it more or less as a trivial matter, there was a very good underlying reason for the discussion. The reason is so that those of us who write for a living and spend way to much time with a keyboard under our pillow would be able to group together and perhaps get lower medical insurance premiums as a result.
Blogger Kirsten Burgard, aka Bendy Girl, was quoted as saying,
“Blogging is very intense _ physically, mentally,” she said. “You’re constantly scanning for news. You’re constantly trying to come up with information that you think will mobilize your readers. In the meantime, you’re sitting at a computer and your ass is getting wider and your arm and neck and shoulder are wearing out because you’re constantly using a mouse.”
She’s right.
But this is no different from writers who have done the same thing for years. Including me. It’s just that bloggers seem to be gaining a bigger “platform” so to speak then that of your typical freelance or independent journalist.
Oh, and for those of you who wonder what this self-employed writer/editor/publisher pays these days for health insurance — with a $10,000 deductible — it’s now $931 a month. And by health insurance standards, I’m in excellent health.
You can spit that coffee out on the keyboard now if you would like.
Just make sure there’s no sugar in it.
If there is anyone out there in the airline industry paying more than I am for health insurance, please let me know.
Technorati Tags: blogger unions, blogs, self-employed, health insurance, web warriors