Monthly Archives: December 2008

Go Mizzou

For those of you who dropped me a note today, asking about my favored team tonight in the Big 12 game — it’s Mizzou. Has to be. Remember I hang out with subscribers who have kids that played with Chase Daniel, Missouri’s quarterback, at Southlake Carroll High School. I’d be run out of town if I didn’t say Mizzou.

And yes, I understand that they are big underdogs.

So what?

Besides I’d love to see the chaos it would cause in the BCS Championship game ruminations if Missouri were to win. Would really shake up everything. And it would also certainly make all those Texas Longhorn fans very happy.

There you go.

Can you tell I’m not a Boomer Sooner?

Very perceptive.

Alabama versus Florida: SEC Championship on The Line Today

Sorry, I couldn’t help it. I saw this and couldn’t stop laughing. What makes it priceless is that as controlling and uptight as Alabama head coach Nick Saban is, you know it must have just sent him over the edge to have seen this picture. Much less the lovely photoshopped CNN breaking news presentation that some unnamed internet fan created for him.


Mesa Air Group/Aloha/ Update: Bankruptcy Judge Says “Not So Fast”


I’m sorry dear readers.

I should have posted this news yesterday. Wednesday, actually.

But I did not want to have to be forced to type the word “MESA” on my birthday. Or even 24 hours ahead of my birthday.

I’m sure you can understand.

But now it is Friday, so here it is.

As we wrote here the other day, Mesa announced last week that it had cut a deal with the major shareholder of Aloha Airlines that would see that shareholder, Yucaipa Cos. receive a rather sweet deal in return for the rights to the Aloha Airlines trademarks, names, logos, internet presence, corporate identity items, etc. Actually the extent of the deal was not made clear until Mesa posted an SEC filing on Monday, but, well, you can read our post on all of it here.

The only catch was that Yucaipa would need to be the highest bidder at the scheduled auction for the rights to these items, which was scheduled for Tuesday.

Tuesday, the auction took place, and Yucaipa did indeed beat out all comers, including Hawaiian Airlines, bidding $750,000 for the rights to the name. Hawaiian’s all-cash bid was $575,000, which was the required overbid after Yucaipa had initiated the auction process as the so-called “stalking horse” with a bid of $525,000.

But then a funny thing happened on the way to Mesa getting the right to use the Aloha name. And the livery. And everything else.

The deal was temporarily blocked by the federal Bankruptcy Court judge who is presiding over the case.

Judge Lloyd King postponed the scheduled hearing on the licensing pact between Mesa and Yucaipa Cos. until Feb. 19 to give supporters and opponents of the deal more time to respond.

“How about all the people whose lives were devastated in this case?” asked King, noting that Mesa and go! are largely blamed for Aloha’s demise. “Doesn’t that count? Is it just the money?”

“I don’t think anyone is sensitive who’s involved in this settlement,” King said. “If this isn’t approved, are people from Yucaipa going to lose their health benefits and their jobs? There hasn’t been enough time for people to react.”

He said that the extra time would give both supporters and opponents more time to respond.

You know, that’s the thing about those federal bankruptcy judges. You just never know what they are going to do. And sometimes — this turns out to be a good thing.

I guess there’s a Santa Claus after all.

All That’s Left…


Yesterday I had another one of those evil days. Yes, a birthday.

And this is all that is left of my birthday cake.

It was a great cake.

Not that very many of you are going to be driving through Slidell, Louisiana any time soon but if you do, be sure and look up a little European bakery on Robert Rd. called F.O.M.

You’ll never touch anything in a Safeway again. Much less a Tom Thumb.

Owner Michael Pastroet says he came up with the name F.O.M. Bakery & Catering while sitting in church one day. Suddenly, it came to him…Fishers Of Men, F.O.M. The bakery, which in my opinion sells its exquisite products for far less than they are worth, has been in operation since 2004.

That’s not that yucky blood-sugar raising confectioner’s sugar icing on there. Nope. Just whipped cream. Lots of real whipped cream. Inside? Light spongy homemade cake in three thin layers, separated by bavarian cream and strawberries.


Go ahead. Drool.

It’s perfectly acceptable.

I would show you a picture of the chocolate covered strawberries they threw in for gratis — just because it was my birthday, but sorry. They’re all gone. 😉

Airbus Leaked Document Skewers Boeing 787 Program


Score another one for Jon Ostower, better known as Flightblogger.

Jon, who in my opinion is the source for all things Boeing, published a document this afternoon that appears to be a copy of a legitimate Airbus presentation entitled, “Boeing 787 Lessons Learnt.”

The 46-page document says that it was presented by Burkhard Domke, Head of Engineering Intelligence for Airbus and it has a date on it of October 2008. You can download a copy by clicking here.

The report outlines a list of problems that Boeing has had and continues to have with the 787 production process under a number of headings:

• Design Issues

• Weight Issues

• Engine Issues

• Certification Issues

• Production Issues

• Schedule Issues

Makes for some interesting reading.

American Airlines, US Airways Release Nov. Traffic Results


Since we started on this traffic, capacity and load factor watch this week, we might as well continue it.

Today American Airlines and US Airways reported their November numbers.

At American, RPMs fell 14.5% compared to a year earlier, but this was more than the airline’s reduction in capacity of 9.3%. This resulted in a drop in load factor of 4.6 points to 76.6%.

For American Eagle, things were even worse. RPMs here were down 21.5%, while capacity was down 15.9%. This resulted in a load factor drop of 4.6 points to 67.3%.

For US Airways, consolidated RPMs dropped 6.9% for November. But this pretty much matched the airline’s reduction in ASMs as the airline posted a drop in load factor of only 0.8 points. Basically flat.

For mainline only, the airline actually did quite well, as it saw RPMs down 3.6%. With capacity down 5.2%, this resulted in an increase in load factor — up 1.4 points to 81.9%.

Mesa Air Group SEC Filing Tells Us Way More Than the Airline’s Press Release Did


Last week Mesa Air Group issued a press release in which it talked about a deal the airline had cut with bankrupt Aloha Airlines’ major shareholder, the Yucaipa Cos. According to the release, in return for Yucaipa dropping all claims associated with the Aloha Airlines antitrust suit that it filed against Mesa, and in anticipation of Yucaipa being the highest bidder for the various Aloha trademarks, logo, and other naming rights at today’s Aloha bankruptcy auction — Mesa said in its release that it had agreed to:

Pay Yucaipa $2 million;

Issue 2.7 million common shares of Mesa Air Group stock;

Provide inter-island travel benefits to former Aloha employees.

Note that in the release Mesa did not say it was going to issue the shares and give them to Yucaipa, a fact that a handful of you pointed out to me this last weekend. It really was stated in a very ambiguous way. But apparently this is indeed the case.

Be that as it may, as I said in this week’s PlaneBusiness Banter, the fact that Mesa Air Group would think that it could simply purchase the name “Aloha Airlines” and start using it — and that this was perceived by Mesa management as a positive marketing tactic — given the fact that many in Hawaii still blame Mesa (rightly or wrongly) for Aloha’s demise — was nothing short of mind-boggling.

However, an alert on the company’s 8-K SEC filing came sailing through in our email box late last night and it seems that there were more than a couple of details of this deal that Mesa did not talk about in its press release.

Here’s the verbiage straight from the filing:

In addition, under the Settlement Agreement, Mesa and Yucaipa agreed to establish a licensing and profit sharing arrangement whereby, in the event that Yucaipa is able to acquire from Aloha in an upcoming bankruptcy court auction the rights to the names “Aloha” and “Aloha Airlines,” Yucaipa will enter into a license agreement with Mesa to license such names to Mesa for ten years (the “Term”) in exchange for royalty payments by Mesa and Mesa will pay to Yucaipa a set percentage of the pre-tax operating profits from Mesa’s operations in the Hawaiian inter-island market. Specifically, for each year during the Term, Mesa will pay Yucaipa 1% of the passenger ticket revenue generated from all Hawaiian inter-island flight operations, subject to a minimum annual revenue payment of $600,000 (the “Revenue Payments”), and will also pay Yucaipa 30% of the pre-tax operating profits from Mesa’s operations in the Hawaiian inter-island market less the Revenue Payments.

If Mesa ceases inter-island flight operations in Hawaii, Mesa has the right to terminate the licensing and profit sharing arrangement. Mesa will provide Yucaipa with a $5 million promissory note payable over five years, at LIBOR +350 basis points interest, reset quarterly, that will become payable if Mesa ceases operations in the Hawaiian inter-island market or breaches the Settlement Agreement. If, at the end of the first five years of the Term, the note has not become payable as a result of Mesa’s cessation of operations or breach, the principal owing on the note will decrease automatically on a straight-line basis over the remaining five years of the Term. If Mesa ceases operations in Hawaii or breaches the Settlement Agreement during the final five years of the Term, the amount payable on the note would be the principal remaining at the time of such cessation or breach. The note will be secured by a first priority lien on certain Mesa assets with a fair market value equal to 125% of the principal amount of the note.

Yes, indeedy. It does appear that there are a lot more ifs, ands, or buts to this deal than had been publicly disclosed in the Mesa press release.

Essentially, in return for the use of the “Aloha Airlines” name, Mesa has agreed to pay Yucaipa 1% of the passenger ticket revenue generated from all Hawaiian inter-island revenue AND it will also pay Yucaipa 30% of the pre-tax operating profits from the operations. If Mesa stops flying in Hawaii, then Yucaipa gets a $5 million promissory note payable in five years at a rather hefty interest rate.

Amazing. Just simply amazing.

Wonder what Yucaipa gets if Mesa declares bankruptcy?

No Wonder My Southwest Airlines Pre-Turkey Day Flight Wasn’t Full


And we thought Continental’s numbers were bad.


Southwest Airlines reported its November traffic numbers this morning. Sitting down?

The airline reported that RPMs declined 8.3% on flat ASM figures. That my friends, translates to a load factor of only 63.2%, down from 69.3% for the same period last year. That is a 6.1 point drop in load factor.

Anyone out there still think that demand is holding steady? Raise that hand higher, I can’t see it.

Not good. Especially with Southwest making the bet earlier this year that people would “book away” from other carriers, preferring to fly with “no fees.”

As usual, Southwest gave no RASM estimates for the month.