Monthly Archives: November 2007

Post-Turkey Quote Of the Day Comes from Airbus

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I’m off to tidy up this week’s holiday week issue of PlaneBusiness Banter, but just couldn’t resist dropping in to convey the news from Airbus this morning.

In a nutshell, Airbus chief executive, Tom Enders  told Airbus employees in Germany yesterday that the sinking dollar is “life threatening” to the European aircraft manufacturer.

“The dollar’s rapid decline is life-threatening for Airbus,” he said in Hamburg. “The dollar exchange rate has gone beyond the pain barrier.”

As the Financial Post pointed out today in a story on the comments, “For every 10¢ the dollar falls against the euro, Airbus loses a billion euros in unfavorable foreign exchange. The euro now sits at US$1.48 against the dollar, up from US$1.35 at the beginning of the year. While the majority of Airbus’s expenses are in euros, aircraft are sold in U.S. dollars.”

Now while I am not sure that the drop in the value of the dollar is the biggest problem Airbus is looking at, there’s no question that its impact is not insignificant.

Having said that,  I think there might be an answer to this problem hidden in my previous story this week about the drama queen in Alabama. Follow me on this one. I mean, if BMW can manufacture automobiles in Alabama, why can’t Airbus make airplanes there?

I can see it now. “Proudly Manufactured in Tuscaloosa” on the side of an A320. Tuscaloosa, Toulouse….what the hey.

I would just make sure they didn’t hire St. Nick to do PR for them. That would mean his face would be on the front and back of every aircraft brochure. Just as it was this year on the University of Alabama’s football media guide.

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Off to Bake The Pumpkin Pie

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…And other various pre-Thanksgiving tasks.

Thought I would stick around online and see if oil was going to hit $100 today, but I think traders are suffering from the Turkey Trot — they want to get home just as much as anyone else. I don’t think we’re going to see a new record price hit today.

Friday? Another day, another chance.

For PlaneBusiness Banter subscribers, we’ll be posting Friday morning, with end of close numbers from today.

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Talk to you later — on the other side of the giblet gravy, stuffing, turkey, crescent rolls, maple baked sweet potatoes, brussels sprouts and goodness knows what else.

Have a great Thanksgiving everyone.

P.S. These Thanksgiving cards are the work of an MIT student, Jennifer DiMase. Check out her work. She definitely has a PlaneBuzz sense of humor.

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SkyWest Completes Sweep of Atlantic Southeast Upper Management

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SkyWest announced today that it has named Brad Holt the new President and COO of Atlantic Southeast.

Holt replaces not only former ASA President Bryan LeBreque, who announced his resignation earlier this month, but previous COO Anthony DiNota, who left the airline in October.

To put it another way — the Delta-placed execs at ASA who came over as part of the deal originally are now gone, and SkyWest has now put one of its own at the top of the heap.

Holt has been with SkyWest for 25 years, having worked in Flight Ops, Operations, and the airline’s Corporate Safety division. Holt’s last position with SkyWest was as head of Flight Operations. Holt began with the airline as a line pilot in 1983.

Good move. Long needed move. With the pilots giving the thumbs-up to the ASA tentative agreement this week, and with these changes in management structure — I can only say — it’s about time. I would expect that we will begin to see the positive ramifications reflected in SkyWest’s next earnings call — but even more so in the first quarter 2008 call.

As we had mentioned here after this quarter’s SkyWest earnings call — it was the first time that I can ever remember SkyWest not receiving at least one of its incentive payments for service — as part of its flying contract with a partner. And that happened last quarter with ASA. While SkyWest, as usual, ran a pretty efficient operation, ASA was horrible.

The airline failed to meet even one of its contract incentive benchmarks.

A side note to the pilots at ASA: Remember when I told you in February of 2006 at the ALPA “Family Awareness” meeting in Atlanta that the SkyWest deal was a good thing — and not a bad thing?

It may have taken awhile — but I stand by my prediction.

Ticker: (Nasdaq:SKYW), (NYSE:DAL)

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Welcome to our iPhone Visitors

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Little did I know when I posted that note from one of our PlaneBusiness Banter subscribers on Saturday concerning the in-flight delay and the onboard iPhone user that it would it catapult our blog post into the realm of high-tech blog stardom.

Funny to read through all the comments that post has generated — it’s clear that most visitors were not airline centric types — but those more interested in bashing/praising the iPhone. Or bashing the airlines.

I must say, it’s rather mind-boggling. Especially the fact that PlaneBuzz was no. 1 on Reddit for part of Tuesday as a result of the post.

In answer to a couple of personal emails to me — no, I don’t own one — yet. I’m waiting for version 2.0. My contract has now expired on my Treo deal with Earthlink. So I’m just biding my time.

Football: Drama Queen Performance in Tuscaloosa

Okay, I have a confession to make. I try, I really try to make sure that every post here has something to do with airlines. Or airplanes.

But sometimes, things just sneak in here.

My snarky little jab at Alabama this weekend was just one of those I couldn’t resist.

And of course, the problem with these posts is that then readers send me notes and force, yes force me to continue the thread. Kicking and screaming.

Well, maybe not.

Saban Input

So, after more than one email today from those of you who were lucky enough to read about Alabama’s Coach Nick Saban’s little performance yesterday following his team’s loss to the University of Louisiana-Monroe — I feel it is my civic duty to get back in here and tell those of you who don’t happen to follow the wonderful sport known as Southeastern Conference Football the following tidibit.

Saturday, Alabama was near-nigh humiliated by the War Hawks of the University of Louisiana-Monroe, 21-14.  Now this is not to say that the War Hawks are not a bad bunch of guys. But hey, let’s put it this way. This should have been  kind of like Steve Nash going one-on-one with some kid in junior high school.

So yesterday, Alabama Coach Nick Saban, the man who lied about leaving LSU, and the man who played cute again with everyone when Alabama recruited him from the Miami Dolphins — the man who has no problem taking $4 million to coach a college football team — yes, that same man, likened the team’s loss to other catastrophes — such as 9/11 and Pearl Harbor.

Here’s the quote from his press conference as he exhorted his team to “rebound”:

“Changes in history usually occur after some kind of catastrophic event,” Saban said during the opening remarks of his weekly news conference. “It may be 9-11, which sort of changed the spirit of America relative to catastrophic events. Pearl Harbor kind of got us ready for World War II, or whatever, and that was a catastrophic event.”

Sorry Nick, but a football game is not quite in the same league as the events that transpired on September 11, 2001. Much less Pearl Harbor. Nick, it’s a GAME. It’s FOOTBALL. I know you think that whatever you are involved in is the most important activity on the planet — but no, I hate to tell you this — Alabama losing to ULM was not a” catastrophe.”

But wait, the story gets better.

St. Nick’s “spokesperson” then issued a statement today. “What Coach Saban said did not correlate losing a football game with tragedy; everyone needs to understand that. He was not equating losing football games to those catastrophic events,” football spokesman Jeff Purington said in a statement to The Associated Press. “The message was that true spirit and unity become evident in the most difficult of times. Those were two tremendous examples that everyone can identify with.”

Ah, excuse me, but I don’t think this makes things any better.

Only worse.

Nick, forget the X’s and the O’s this week. Before you lose to Tommy and the boys from Auburn this week — go spend some time under some rocks — and try to get some perspective.

Before those irate Alabama fans start leaving bags of burning cow patties on your front porch.

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Surprise! No, not Really

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As if you smart guys could not figure out why it is that airline stocks are getting the smackdown treatment today — a big reason is you-know-what.

Yes, the price of oil is rearing its ugly head today again.

As of this writing, it looks like the price of a barrel of crude is now up more than $3. In one day.

Crude is currently trading at around $98 a barrel.

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Anybody Wanna Buy An Airline?

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Taking a look at the sad state of affairs the airline sector finds itself in today, one can’t help but wonder if we’re getting to the point where it’s simply ridiculous not to assume that there is at least one, if not more mergers or other types of link-ups just around the corner.

Why?

Because airline stocks are cheap. And, as of today, getting even cheaper. And if airline stocks are getting cheaper, that means market caps are as well.

Glancing at the rundown from today’s trading — at this writing, shares of Southwest Airlines are hovering around $13.00 a share.

Shares of United Airlines? Down a hefty 10% to $36.65. That will put some of those spoils-of-bankruptcy options under water.

Then there is Mesa Air Group. The airline was told yesterday in U.S. Bankruptcy Judge Robert Faris’ courtroom that it has to post a $90 million bond, pending the result of the airline’s appeal of Faris’ recent ruling against the airline in the case involving Hawaiian Airlines.

Last week Faris had told Mesa that the bond could be as high as $98 million, but that was based on the assumption that the appeal would be heard in a U.S. Bankruptcy appellate court. As the case will now be heard in a Federal District Court, the waiting time before a decision in the appeal process will be closer to a year, rather than three.

Hence, the lower figure. However Faris also warned that the bond could be adjusted further, depending upon the result of the District Court’s ruling.

Not the news that shareholders of Mesa wanted to hear. Obviously. Shares here are now trading down about 12% on the day, with the airline’s shares currently trading around $3.45. Yes, $3.45.

At prices like this — I wonder if any of the other regional airline players could be taking a look at Mesa? I mean, consolidation is not necessarily a “major airlines only” possibility.

Delta Air Lines is having a miserable day as well, with shares here down 9% for the day, currently trading at 17.26 a share. Continental? Shares here are down 8% to $25.57.

Yikes.

Ticker: (CAL;NYSE), (DAL:NYSE), (MESA:NASDAQ), (UAUA:NASDAQ), (LUV:NYSE)

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I Have This Thing About Misspellings in Press Releases…

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Can’t help it.

If someone is going to take the trouble to issue a press release about something, and pay the money to do so through PR Newswire, the credibility of the press release is then completely shot when I read a sentence such as this. (Actually I have other problems with this whole survey, but that’s another issue.)

From today’s release touting the new Zagat Airline Survey,

“Discontent with the air travel industry is so high that 61% of the respondents favored the enactment of the Airline Passengers Bill of Rights, which, inter alia, would insure that passengers be compensated for bad air travel experiences. Only 5% oppose the bill while 34% still don’t know what it is.”

This sentence ENSURES that I won’t take much of the rest of the story seriously. For more reasons than one.

Inter alia? Apparently this writer not only cannot spell, he or she likes to impress people with his or her Latin knowledge too.

I’m really impressed. Aren’t you?

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