Monthly Archives: February 2010

PlaneBusiness Banter Now Posted!

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Hello everyone.

The latest issue of PlaneBusiness Banter is now posted. Subscribers can access this week’s issue here.

So who do we dissect this week?

Republic Holdings.

I’ll be honest. I’m still on the fence with this attempt by Bryan Bedford and the Republic management team to cobble together a new airline out of discarded parts of Midwest and Frontier Airlines.

I was hoping that this quarter we could get more visibility from the airline’s earnings results as to how the grand experiment is faring — but while Wall Street apparently liked the airline’s results (the airline’s stock led the sector this last week picking up a cool 14%), I didn’t hear anything that really won me over.

So — call me “continued skeptical.”

Had to snicker when the airline talked about how it was “harvesting synergies” of the Midwest/Frontier combo. “Harvesting synergies”…..fine example of corporate speak.

That kind of stuff makes me break out in hives.

We had one other regional airline report earnings this last week and that airline was ExpressJet. If you look only at the airline’s net profit numbers, it would appear that the airline did pretty well for the quarter. But no — the reason the airline posted a profit was because of a huge both cash and non-cash tax issue. The airline posted a $17 million operating loss — that was also a clear indicator that no, this was not that good of a quarter.

Meanwhile, the airline remains without a permanent CEO. You may recall that the airline’s CEO Jim Ream left the airline effective Jan. 1 — as he took the SVP of Maintenance and Engineering gig at American Airlines.

The weather certainly created a whole slew of new cancellations last week for many of the U.S. carriers. Adding to the pain of the New York area airspace – the longest runway at JFK International was officially shut down today — as the airport prepares to rebuild and widen it. It will be closed for four months.

I know. Let the fun begin.

On the economic front, it was another yin-yang week for economic tea leaf reading, but on the airline economic/RASM front, analysts continue to fall all over themselves about just how great year-over-year RASM numbers are going to be for the next 3-4 months.

Or as JP Morgan analyst Jamie Baker said at one point, “If it flies, buy it!” Actually Jamie acknowledged last week that he is not quite that bullish now — but tonight we should get our first glimpse of higher RASM numbers — as Continental rolls out its February traffic report.

All this and more, including Japan Air Line’s horrendous loss, Air New Zealand’s nice profit, Aircell’s win at Alaska Air Group, fighting flight attendants, a new high-end, but reasonably priced crash pad for pilots in Houston, and more in this week’s issue of PlaneBusiness Banter .

Rock On!

The energy gods have shown down upon the Worldwide Headquarters. There is once again electricity humming through the lines to the great outside world. Which means the computers are buzzing, the printers are printing, the washer is washing, the dryer is drying, the stove top is cooking, the television is yapping, and most importantly — Holly got to take a nice hot shower and get cleaned up!

Ahhhhh. I can’t remember the last time a shower felt so good.

As for PlaneDad, my thanks to the folks at Expedient Home Health services, who managed to find us a place to move him to — had the energy gods not decided to play nice. But since it’s warm again, he says he isn’t going anywhere.

The man knows the food is definitely better if he stays here. (That’s assuming the electricity stays on!)

Day Two: Temperature 50 degrees

image176257225.jpgFor those of you on the East Coast who contnue to dig out from record amounts of snow today — I know that 12 inches of snow does not sound like a big deal.

Unless that 12 inches of snow causes one to lose power.

It’s now been 24 hours since the power first went out at the Worldwide Headquarters here in DFW. While it is very beautiful outside — with all that heavy white snow on the ground, the problem is that this same heavy white snow is causing limbs to come down all over the place. Last night the sky was lit up all night with the bluish sparks from generators as they blew.

Temperature outside at 9 A.M? 32. Temperature inside? 50.

Ability to get any work done?


Adding to the uncomfortable quotient is the fact that 90 year-old PlaneDad is at the Worldwide Headquarters… recovering from hip surgery. If it was just me and the other canine and feline assistants, I would not be as concerned. But I fear I may have to begin working on an emergency evacuation an for him in the next couple of hours. Circulation, cold feet, diabetes. Yep. You get the picture.

Speaking of pictures, here is one of my assistants now. You can see that she has the right idea.

Yes, thank goodness for gas logs.

United Airlines Blows Doors Off With January RASM Estimate


I’m sitting here waiting for final edits to be done on this week’s issue of PBB, and was just looking at the wild party going on with airline stocks today.

In case some of you are wondering what is going on with the sector today — which is up significantly across the board — United Airlines issued the first of its revised format traffic reports after the close of the market yesterday.

As CFO Kathy Mikells discussed in the airline’s recent earnings call — and we talked about in PlaneBusiness Banter — she is attempting to increase the level of transparency in the airline’s financial reporting. As a result, the airline is now going to provide a RASM estimate, along with the usual traffic information in its monthly traffic release. The airline is also going to provide an update as to its current fuel costs.

Airlines like Continental, JetBlue, and US Airways already provide RASM estimates when they report their monthly traffic numbers.

When the new-look United Airlines release hit the wires last night — all of us received quite a shock.

The airline easily blew past analyst forecast RASM numbers — as the airline estimated that its RASM in January was up between 9.5% and 11.5%. Analysts had forecast a figure somewhere between 3% and 6% — depending on the analyst.

So — there you go. That is why airline stocks are frolicking today.

At last check, shares of United were up 17% for the day, trading at about 15.28.

PlaneBusiness Banter Posted Today

An advisory for our PlaneBusiness Banter subscribers. The latest issue will be posted today. My apologies for the delay. No, I am not still celebrating the Saints win Sunday night. No, no. I wish that was my excuse.

No, as most of you know, PlaneDad is camped out at the Worldwide Headquarters, as he recuperates from surgery to repair his broken hip.

Things generally have been going well on that front, but this weekend was rough, (a follow-up from some aggressive physical therapy on Friday) and Monday was a rather, er, trying day.

Hey, life happens.

This week’s issue of PBB will be posted later today. I’ll post a note here as I always do after it is up and ready for your perusal.

Now — go do what you usually do on Tuesdays.

Guest Columnists Welcome

Thank you all for your patience as I try and absorb what I witnessed on television Sunday night. Forty three years of abject frustration and crushed hopes are now history.

The old visuals in my mind? When that damn field goal kicker for the Los Angeles Rams kicked one down the middle to keep the Saints out of the playoffs in the mid-80s. Or then there is the video in my head of the Monday Night Football game I attended in the Dome when Kenny Stabler and the Oakland Raiders erased a 28 point half-time deficit to come back and beat the Saints. Aint’s bags. Archie Manning being booed off the field and trash dumped on his head.

I suppose my greatest ire is reserved for Saints owner Tom Benson, who clearly thought he was going to pick up the team and move it to San Antonio after Katrina. Watching him and his squirmy comments after Katrina made me want to reach through my television and strangle him.

But thankfully — then-NFL Commissioner Paul Tagliabue had other ideas. Thank you Paul.

This morning, I am happy to report that the new visual in my mind is that of Drew Brees with his son on the podium last night — enjoying the moment.

May we all have those times in our lives when we too can — enjoy the moment.

Speaking of — any of you want to enjoy a PlaneBuzz moment?

After the return of our long-lost guest columnist Frank Arciuolo last week, (and yes, I was glad to read that some of you got as much of a kick out of his photo as I did), I wanted to let all of you know that, yes, PlaneBuzz is always open to guess columnists.

Last year I began to focus more of my time and attention to our flagship publication of the PlaneBusiness empire, PlaneBusiness Banter. Why? Because those folks who subscribe to PBB deserve the bulk of my attention.

There are any number of blog sites/news sites now that can give you news-breaking tidbits about the various airline-industry antics. At no charge.

But I have no desire to try and compete in that league. I can’t. Unless I want to go on food stamps and bask in the knowledge that I am working for a non-profit entity.

And no, I have no desire to do that. No sir-ee.

As a result, for the last six months or so I have struggled with just what I should and should not write about here in PlaneBuzz.

Going forward, I would like to hear from more of you about whatever topics are important to you — and if you’d like to jot down some of your own thoughts — just drop me an email.

In addition, from time to time, I am now going to post material from PBB either directly here in PlaneBuzz or I will link to it from here, enabling everyone to read certain columns or interviews. But these will be posted on a delayed basis. Subscribers to PBB will continue to get first dibs.

The first of these reposted pieces will come this week, when, after a tremendous number of requests to do so, I will let everyone read my recent interview with the Chairman of the Delta Air Lines ALPA MEC — Lee Moak.

Again, look for access to that lengthy interview here in PlaneBuzz this week.

But again — if any of you have a desire to tell all of us how you feel about something pertaining to the airline industry — drop me a note. We can hash it out. Polish it up. And give you your own chance at having your own PlaneBuzz “moment.”

Submission inquiries can be sent directly to me at

Just put “Buzz Comment” in the header of the email.

Now, excuse me while I go finish the in-depth earnings report on Allegiant Travel Company, parent of Allegiant Airlines, that will be included in this week’s PlaneBusiness Banter. Yep, another mega-earnings issue is on tap this week. This week we have an interesting mix of airlines that we take a closer look at — AirTran, Allegiant, and Alaska Air Group.

The Super Human IT Effort A Reservations System “Migration” Requires

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Editor’s Note: This week I welcome a previous contributor to PlaneBuzz, Frank Arciuolo. Frank has not been seen around these parts in a long time. For reasons he talks about in his latest effort. I figure he felt sorry for me after it took him two hours to read this week’s issue of PBB, and thought the environs around here had been much too quiet!

In his previous efforts in PlaneBuzz, we used a “Godzilla” rendering for his ID photo. I figured it’s time you get to see the real deal. Mud and all. Enjoy!

Hi there, Godzilla here. I know it’s been a very long time since I’ve contributed to PlaneBuzz but I’ve been preoccupied with some of the more mundane things in life – like trying to find gainful employment. My plan when I left my last job at the beginning of 2008 was to do some part time flight instruction and get a part time job as an FO on a corporate jet – I even got my CE500 type rating.However, like they did so many other people, circumstances conspired against me. Taking flying lessons is well down the list of priorities for most people now, if it makes the list at all. And right seat jobs in corporate aviation are as scarce as, well, the hair on my head.

But, I digress. Anyway, thanks to Holly for letting me fill my idle time and the pages of PlaneBuzz simultaneously.

You know the feeling an ex-airport ticket agent gets when he/she wakes up on the Wednesday before Thanksgiving, looks out the window to see dense fog – then rolls over and goes back to sleep because they are off that day? That’s the feeling I got when reading about recent events at WestJet concerning their reservations system cutover and the system cutover at JetBlue this weekend.

In my previous lives I’ve participated in about 8 reservation system cutovers; one as an airline employee and the others as an interested bystander, AKA a vendor. My advice to any IT person working at an airline that is considering switching reservations systems is to dust off the resume and start networking (the people kind). People in the reservations system business (the “biz”) often refer euphemistically to a reservations system cutover as a migration. That’s a nice word, migration. It gives one the vision of a flock of Canadian geese traveling to MIA for a nice warm winter.

However a reservations system migration, or at least the ones I’ve been involved in, does NOT resemble a migration of birds to South Beach for the winter. Picture a reservations system migration as a flock of 1 million geese leaving Canada on a Friday night. On Saturday morning nobody can find ANY geese ANYWHERE. By Saturday mid afternoon 3 million birds arrive in Tampa, but only 25% of them are actually the geese that left Canada Friday night, the rest are pigeons. By Saturday night trucks have been chartered to take ALL of the birds from TPA to MIA because nobody wants to let them out of their sight. The trucks arrive in MIA Sunday morning and are gone through manually (by IT employees) to determine which are the geese they want to keep and which are the pigeons. Sunday night the airline CEO does the math and realizes that 25% of 3 million does NOT equal the 1 million geese he had Friday night. Where are the rest of the geese? Holy crap, what’d we do with those pigeons? Resumes and bird poo simultaneously hit the mail and the fan Monday morning.

Funny story, yes, but perhaps more real than you think. Airline reservations are literally money in the bank. Moving this valuable asset from one point in cyber space to another is fraught with land mines. There are a host of technical issues that would make your eyes glaze over and I’d be happy to talk about them in detail to any other IT geeks out there, but that’s not today’s point.

Since migrating is such a gut wrenching experience where the BEST result is a zero sum gain (and the worst result is working in bird poo), don’t do it! Some cutovers are unavoidable, like the DL/NW move and whatever will eventually happen with YX/F9 and the boyz in IND. Those cases also represent mergers/acquisitions, where the party on each side of the transaction has an interest in avoiding a train wreck. Migrations that are the riskiest are the ones where an airline is changing reservations systems they may have outgrown, or perhaps for a better deal.

Traditional hosting or multi host systems are very good at high volume transactions and at communicating with Global Distribution Systems (GDS) and other systems. Because they communicate with external systems so well, traditional host systems can greatly expand an airline’s distribution reach. However, since those external systems, by design, withhold certain information from the host system (like fare basis code, form of payment, and other key customer information), the host system has difficulty figuring out of someone booking in an external system has simply reserved a seat or has actually purchased a ticket. Traditional host systems are excellent for generating large volumes of bookings and they can ensure tickets are purchased on booking within its system, but not as good as ensuring the purchase of bookings made outside its system.

The newer reservations systems are much slicker at communicating with customers within their system and with the airline’s web site, but are not very good at communicating with outside GDS and other systems. Like the traditional hosting systems, they are good at forcing the customer to purchase a ticket before ending the reservation. One big advantage they have over traditional hosting systems is that the newer systems create a database of the airline reservations. A real database allows the airline to do detailed analysis of its customers and to effectively execute Customer Relationship Marketing (CRM) to its customers based on their purchases. This type of information makes airline marketing people salivate at the possibilities for the easiest type of marketing there is – to your existing customer.

For a boutique type airline starting out that has made the decision to remain out of the GDS and its evil and expensive booking fees, the selection of a reservations system would lean towards one that allows better CRM. However if the airline grows to a point where expanding the distribution network is necessary, as is agreeing to booking fees and all the rest, they’ve chosen the wrong reservations hosting system.

It makes sense to either add the robust external communication feature to the true reservation database system, or add the relational database feature to the traditional hosting systems. The first system to truly do that will have the golden egg. However, there are immense technical challenges of taking the incredibly dense set of text files (which is really what they are) that are contained in the reservations systems of AA, UA, DL, etc. and indexing them into a relational database. That would seem to argue for a solution that “bolts on” to the big hosting system and allows both systems to do what they do best.  

Until this happens, try to be on vacation the weekend your airline reservations migrate!