Monthly Archives: July 2010

Mega Earnings Issue of PlaneBusiness Banter Now Posted! — United Airlines Tague and Mikells To Leave

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Hello everyone.

This week we have a 100-plus page earnings issue of PlaneBusiness Banter for you to peruse at your leisure. And yes, at that length, it should more than take up all of your leisure time for the week. Have no fear. Next week we’ll give you another one!

This week we take in-depth looks at the recent earnings results posted by American Airlines, US Airways, United Airlines, Continental Airlines and Delta Air Lines.

This coming week the PlaneBusiness microscope will be trained on the 2Q results of JetBlue, Alaska, AirTran, Allegiant and Southwest Airlines — which is scheduled to report its second quarter numbers on Thursday.

A couple of quick observations from the group we took a look at this week.

One, even before the formal announcement was issued this morning, it had been clear for some time that United Airlines President John Tague was not a member of the executive transition team that was going to stay with the “new” United. That fact was also crystal clear as you listened to the airline’s earnings call last week.

This morning, the airline formally announced that John, Kathryn Mikells, Graham Atkinson, and Rosemary Moore would not be staying with the “new” United.

Zane Rowe, current CFO at Continental will remain, but Pete McDonald will come over from United as COO. As for the rest of the top tier execs, including those heading up marketing, communications and HR, all will come from Continental. And of course, Jeff Smisek will be CEO.

We told you so. From the beginning.

Back to earnings.

Of this group, there was clearly one airline that posted earnings above and beyond — that airline was US Airways. In fact, while the airline’s numbers were great as they were, the airline would have seen their EPS figure come in 8 cents higher — had the airline chosen to classify a refund from the TSA as regular income — not a special item. (As some airlines chose to do, including United Airlines.)

The airline posted one great quarter. On a number of fronts. It managed to stash a nice chunk of cash as well.

As for United and Continental, it’s really kind of pointless to talk about them as viable standalones at this point because the merger looms in the background. In terms of potential stock investments — I’d say all bets are off here until after the actual merger is much further along.

Delta Air Lines, which was the subject of our last non-PBB post here in PlaneBuzz had a nice quarter, and yes, the comments it made about guidance and its fourth quarter increase in capacity were way overblown.

All of that capacity hysteria was so yesterday.

Good quarter for the folks in Atlanta.

And finally, American Airlines trudged out its loss for the quarter last week as well.

We are once again putting American Airlines on the official PlaneBusiness Titanic Watch this week. The airline announced a number of executive changes this last week — but I’m not sure they are going to be enough to get the airline out of its self-created sinkhole.

More on all that in this week’s issue.

We also wrap up the news from Farnborough, and we talk about the legal move US Airways announced Monday, as they try to attempt to break the seniority fight log jam that exists between its pilots.

And finally — yes, we talk about the ongoing Tarmac Tales. Consulting studies, DOT rants, and all.

All this, and more — including a shot of the new Virgin Atlantic livery. Woo hoo! (We have to do something to celebrate Sir Richard’s 60th birthday.)

Subscribers can access this week’s issue here.

PlaneBusiness Banter Now Posted

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Greetings to one and all.

Let it be known that yes, the second quarter earnings season for the airline industry is now officially upon us. Before the week is over, nine major airlines will have reported earnings.

Yes, count them. NINE.

Kicking off this quarter’s festivities was Delta Air Lines. And boy, did the airline make a scene. While the airline posted its biggest quarterly profit since 2000, analysts and traders were none to happy with the airline’s guidance comments, and its fourth quarter capacity forecast.

While we don’t do our formal transcript review and earnings summary for Delta in this week’s issue, I do talk in detail about what the airline reported and give PlaneBusiness Banter subscribers a cross-section of comments from a number of analysts who cover the stock.

This is also a big week for those who love airplanes and the men who like to buy them.

Yes, it is time for Farnborough. I talk about the big deals that were announced Monday — and update you on just how well capitalized Steve Hazy’s new leasing venture is. Answer: Very.

Don’t look now but Congress is sniffing around airline fees. Not only does Congress want to make sure that passengers know exactly what they are going to have to pay for when they book that flight, Congress is also now making noise about how it wants to start taxing those fees that passengers are clearly aware of.

Remember — fees are not taxable, whereas fares are hit with a 7.5% tax.

Things are so dire in Washington that 7.5% looks like a potential luscious low-hanging fruit.

We had another airline analyst pick up her bags and move to new environs over the last two weeks. Helane Becker, formerly with Jesup and Lamont, is now with Dahlman Rose and this week she issued a slew of new coverage on the sector.

Finally, a big thank you to our subscribers who have experienced some weird goings-on with the site the past two weeks. Page numbers have been screwy, log-in credentials have changed, and I just realized tonight, for example, that our headline page on the site somehow got changed to one from June 28. Nice. I’m sure some of you were wondering what planet we were on.

No planet. Just our own small equivalent of IT cutover hell.

As always, all of this, and more in this week’s issue of PlaneBusiness Banter.

PlaneBusiness Banter subscribers can access this week’s issue here. (Note, that is a new link folks. Please bookmark it as such.)

Delta Reports Earnings And Airline Stocks Go Splat


Delta Air Lines reported earnings this morning, the first airline to report earnings for the second quarter.

While the headline numbers for the airline’s results look quite good on the surface — airline stocks began to drop after the numbers were released and they have yet to get up again.

Why is this the case — if Delta reported such a large profit?

If you are a PlaneBusiness Banter subscriber, you might have a good idea. As I said three weeks ago, I think a lot of this recent giddyness concerning the “return” of airline revenues is, I believe, on shaky ground.

Yes, no question that the second quarter numbers should be good across the board for the sector — with one glaring exception. The only major airline that will probably post a loss for the quarter is AMR, parent of American Airlines.

But as I talk about in this week’s PBB, we are now seeing a number of economic metrics that are pointing toward a recessionary recovery in the U.S. that is running out of steam.

Take those developments, coupled with the fact the airline industry is now looking at the start of a traditionally slow period in September — throw on results from Delta that disappointed on the revenue side — and poof. A perfect recipe for an airline sector selloff.

Now you know.

PlaneBusiness Subscriber New Log-In Update


Hello everyone. Holly here.

As of about 20 minutes ago, all of us here at the Worldwide Headquarters *believe* (important word here) that the new log-in system for PlaneBusiness Banter is now working properly.

We had a few hiccups this afternoon as we made the cutover, but I think those small annoying problems have all been taken care of.

What does this mean if you are a subscriber to PlaneBusiness Banter?

It means that your previous user name and password that you used to access PBB prior to this week no longer works. It’s done. Toast. Dead.

If you have not received an email from us yet — assigning you a new assigned user name and password, or if you have any other questions concerning the change, please contact our subscription manager.

PlaneBusiness Banter Now Posted!

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Hello there friends. It’s that time once again. Yes, that time when we here at the PlaneBusiness Worldwide Headquarters work our little pencils to a numb and our brains to a frazzle.

And poof — out comes the latest issue of PlaneBusiness Banter.

This week we talk about June traffic and RASM estimates. After Continental’s miss right out of the box, all the rest of the usual suspects that report RASM estimates came in pretty darn well, including the airline sector’s top stock for the week — US Airways.

The DOT issued its May Airline Consumer Travel Report this last week and US Airways and Alaska both had great months. We pick the numbers apart more closely as we usually do. Oh and yes, cancellations were up. As for the number of flights that saw passengers on the ground for 3-plus hours — that would be five. Four were United Airlines’ flights that were diverted to Colorado Springs and one was a Delta Air Lines flight.

So, as we ask this week — when is the DOT going to send both airlines their itemized bills — per the new 3-hour tarmac rule?

We talk about the latest analyst tweaks. Remember– second quarter earnings are right around the corner.

Oh and of course we talk about Boeing and Airbus this week. Airbus just got dinged by the WTO, which ruled that yes, the company had received illegal subsidies. The case against Boeing was supposed to be ruled on by the WTO this month — but now that has been postponed to September.

Bad timing for Airbus, which is smack in the middle of the U.S. Air Force Refueling Tanker contract fight with Boeing.

Looks like the American Airlines/British Airways deal is finally, mercifully, going to get the European nod this week.

And oh, we have lots of mail this week. Including a very long letter to the editor concerning the concept of “job security” and some follow-up reader notes concerning our annual “Ode to a Hot Dog” column.

Oh and what about the Colgan Air pilot who was just busted for having one of the largest collections of child pornography ever seized?

No wonder Pinnacle wants to make the name “Colgan Air” go away.

It’s never boring around here.

Subscribers can access this week’s issue here.

For all of you who are not subscribers, shame on you.

PlaneBusiness Banter Now Posted!

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

This week we take a look at the Second Quarter Stock Performance for the sector. Guess which airline posted the biggest gain for the quarter?

Actually a non-passenger airline posted the biggest gain overall. But one of the legacy carriers came in second place.

Unfortunately the second quarter was almost a complete reversal of the first quarter in terms of the number of airline and airline-related stocks that posted double digit gains — as opposed to those that posted double-digit losses.

I guess you could say this week’s post Fourth of July holiday issue is somewhat food centric. We do our annual “Ode to a Hot Dog” column this week, and we also talk about the recent USA Today piece that took another look at the problems facing airline catering companies. As I said today, it puts a whole new spin on the phrase, “Roach Coach.”

But was the article a fair representation of the problems — and the scope of the problems?

Then there was the passenger on US Airways last week who apparently thought there was nothing wrong with bringing his own maggot-infested piece of meat stuffed in his overhead bag onboard his flight.

Until the maggots started to escape.

I think the guy should be banned from flying on any US airline for life.

Congrats to the guys in Corp Comm at US Airways who showed a good sense of humor in their employee publication this week as they led a story about the incident with the headline – “Airline to charge new fee for Carrion.”

We also talk a lot this week about the announced deal between Google and ITA Software. This deal intrigues the heck out of me. We talked to Forrester Research Analyst Henry Harteveldt about what this deal could mean for the airlines, the GDS companies, and meta search outifts like

Guess who is going to feel the biggest impact the fastest?

Slot swaps, unionization efforts, new names for Frontier’s latest spokesanimal and more — all in this week’s issue of PlaneBusiness Banter.

PlaneBusiness Banter Log In Problem Resolved

Our previous log-in problems at PlaneBusiness Banter have been resolved. We are in the middle of a software transition and apparently a part of the new system went live before it should have.

All is back to normal as of now.

Subscribers please note: We’ll be rolling out instructions for accessing the site utilizing our new software in the not-so-distant future. Stay tuned.

Thanks again for your patience.

PlaneBusiness Banter Subscriber Log-In Problem

Hi guys. A funny thing happened on the way to our cutover to the new log-in/access system for PlaneBusiness Banter. The software guru told us this morning that the work was more or less ready to go — but this was only supposed to mean that it was okay to schedule the actual cutover.

Yes, well, I think instead …the cutover was DONE.

About ten minutes later I began receiving notes from subscribers saying they could not access this week’s issue.

Yes, just one of those techno clusters we all enjoy so much. Don’t you just love them?

Anyway, the appropriate folks who can fix the problem are now working to either return us to the previous system, or they are going to advise me on what we need to do to make sure everyone can get in– using the new system.

Please be patient. If you are a subscriber and we have your current email address, you’ll receive an email letting you know when the doors are open once again.

Thank you. You may now resume your Fourth of July party planning activities.