Monthly Archives: April 2011

PlaneBusiness Banter Now Posted!

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Hello everyone.

This week’s 120-plus page earnings issue of PlaneBusiness Banter is now posted. Yes, it’s that time again. This week we have our in-depth analysis of the first quarter earnings results and earnings calls from American Airlines, Alaska Air Group, Southwest Airlines and United/Continental. Oh, and we have a PlaneBusiness Earnings Summary for JetBlue as well. We’ll do our in-depth look at them next week — along with US Airways, Delta Air Lines and Hawaiian Airlines.

Short and sweet? The worst performance last week was clearly posted by AMR. Best overall performance was turned in by Alaska Air Group.

No wonder AMR announced it was going to hold its annual shareholder meeting in Los Angeles next month. That’s right. The airline doesn’t want to hold it in Dallas — because they know there will be a huge turnout of unhappy employees.

I bet there are a fair number of unhappy employees who turn up in L.A. anyway. But let’s face it — LAX is not a huge American Airlines operation. The turnout will undoubtedly be much smaller than if they held it here in the DFW Metroplex.

But we talk about other stuff this week as well. The NTSB issued an update on its investigation of the Southwest Airlines‘ aircraft that popped its top. Interesting reading that was. Are misshapen rivet holes a production issue, or some kind of metal fatigue problem? Either way — it looks like Boeing has some problems here.

Then there is the ongoing air traffic control mess with the FAA. As expected the agency has responded to a spate of recent sleeping controller incidents by issuing some typical knee-jerk reaction responses. This is not a knee-jerk problem.

The deep-seated FAA/air traffic controller problems have been there for years. This is not about naps.

Can FAA Administrator Randy Babbitt finally do the hard work and solve the problems? We know he can. He’s got the labor negotiation background to pull it off. But does he want to?

US Airways filed a lawsuit against Sabre last week — the latest salvo in the airline/GDS wars. We have a copy of the actual filing for subscribers to peruse. Interesting reading.

In our “Retro Moment of the Week” we take a look at comments former airline analyst Sam Buttrick made about consolidation in 2000. How do they stack up in hindsight?

We also look at Rodman and Renshaw analyst Dan McKenzie’s latest capacity analysis. Which airlines are moving capacity out of what markets — and which airlines are looking at more competitive capacity moves in the second quarter?

Oh, and what airline merger does Dan think is a strong possibility?

All of this and more in this week’s large and unwieldy issue of PlaneBusiness Banter. Subscribers can access the issue here.

PlaneBusiness Banter Now Posted!

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This week’s issue of PlaneBusiness Banter is now posted. This week’s issue is one of those “kitchen sink” issues. First we peer into the financial reports of the four largest airline pilot unions — ALPA, APA, SWAPA and USAPA — spurred by my wonderings about just how much the US Airways’ pilot union, USAPA, is paying out in legal fees. Boy, did I open a nice big Pandora’s box. Who says we only have to dissect the financial statements of the airlines?

Then there is American Airlines. No, the airline is apparently not in talks to do a deal with Mexicana, even though press reports south of the border indicated otherwise over the weekend.

Meanwhile, tomorrow is not only the day that American Airlines announces its first quarter loss. It is also protest day for American employees. Concurrent with the airline’s executive level bonus allocations, the Association of Professional Flight Attendants are going to be protesting — and I would bet there will be some other airline employees contributing to the effort.

On the corporate travel front, American filed suit against Travelport and Orbitz last week. They even dropped the “Sherman” antitrust bomb in their filing. Yep, American thinks there is some anti-trust issues here. Travelport and Orbitz, not surprisingly, think this is merely a play for leverage.

Speaking of earnings, we have a line-up of heavyweights on Thursday, followed by another heavy day next Tuesday. We get you up to date on analyst expectations and reporting dates.

If it is time for first quarter earnings, then Proxy Statements are also in the mix. Those are those horribly confusing and hard-to-figure out SEC filings that tell us just how much the top executives at the airlines took home in compensation during 2010.

Southwest Airlines filed their proxy statement last week, and, well, let’s just put it this way. Remember when the airline used to have the lowest top-tier compensation levels in the industry — and they made a big deal about the fact this was the case? And they were proud of the fact? It’s not the case anymore.

Oh, we talk about that, we talk about how airline stocks did last week, we talk about the TSA’s patdown of the six-year-old, we alert you to a museum collection of air sickness bags, and we talk about a lot more — in this week’s issue of PlaneBusiness Banter.

Subscribers can access this week’s issue here.

PlaneBusiness Banter Now Posted!

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Good evening earthlings! This week’s issue of PlaneBusiness Banter is now posted.

This week I talk a lot about US Airways. For good reason. I attended the airline’s “Unplugged” Media Day last week. The airline used the occasion to announce it is upgrading its regional airline fleet with first class cabins. But that was not the only news to come out of Tempe. We’ll give you the low down.

That doesn’t mean we’re done talking about Southwest Airlines and its recent fuselage problem. Nor have the late night talk show hosts.

Last week Southwest Airlines CEO Gary Kelly and American Airlines CEO Gerard Arpey both sat down with Terry Maxon from the Dallas Morning News at the SABEW Conference in Dallas. Gary talked about the Southwest incident and Gerard talked about the recent bogus offer to buy the airline from that outfit in Florida. Yes, as we assumed, the SEC is looking into it.

Speaking of Dallas, the DOT reported its February Air Travel Consumer Report last week. As expected, it was not a good month for airlines based in Dallas. (February ….ice…snow…Superbowl on ice.)

Expedia and American Airlines kissed and made up this week. But this news leaves a lot of very ragged and messy things to clean up on the corporate travel terrain. We like TheBeat’s Jay Campbell’s take on the news. We’ll share his take with you.

While pilots for United and Continental Airlines keep working on a new contract, all is not apparently warm and fuzzy on the United Airlines pilot side of the house. Reports say that there was a recall vote originally scheduled for Monday’s UAL ALPA MEC meeting. The intended victim? The pilot’s current MEC Chairwoman, Captain Wendy Morse.

Meanwhile the flight attendants at American Airlines offered up a deal for the airline. An immediate 6% raise for its members — and the rest of the contract details would be tabled for 18 months. The airline said no.

Speaking of American — April 20 is just around the corner. That’s the day you can expect to see protests from airline employees over the airline’s latest PUP bonus distributions.

We talk also take a look this week at just how much additional revenue and/or capacity cuts the airlines would need to make — in order to cover the current price of fuel for the remainder of the year. That’s a sobering chart. Thanks to Dahlman Rose analyst Helane Becker for the analysis.

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

Subscribers can access the issue here.

PlaneBusiness Banter Now Posted!

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Hello all. This week’s issue of PlaneBusiness Banter is now posted. As I write this, I am literally throwing things into my bag, on my way to Phoenix for this year’s Media Day event at US Airways, so I am going to be a bit shorter than usual with our weekly summary.

This week I wrap up coverage of the recent JP Morgan Transportation Conference with a look at the presentations from JetBlue and Alaska Air Group. Did you realize that Alaska does not finance its Boeing 737 aircraft? It pays cash for them. And hey, we aren’t talking about cheap MD-90s like Allegiant buys either.

Of course we talk a lot this week about the latest “hole in the roof” problem that Southwest Airlines experienced last week. Thankfully, after a one foot by five foot gash opened up in the roof of one of its flights, the pilots were able to land the airplane safely in Yuma, AZ.

While the airline was quick to say the issue was not related to the problem the airline identified as a result of the last fuselage skin rupture, it does now appear that the two aircraft do have something in common. They are both “older process” 737-300s that also happen to have more than 30,000 cycles.

That “older process” is the interesting part, because apparently Boeing changed the way the airplanes were built at some point along the line — and specifically in regard to a part of the aircraft’s structure that is now in the spotlight.

On the financial side, this week I had a chance to talk to Paul Jacobson, SVP of Finance, Treasurer, at Delta Air Lines. I appreciated him taking the time to talk to me. The subject of our discussion? How Delta Air Lines manages its cash. Inexpensively. Last week we posted a graph that looked at revenues/cash on hand at the end of the year, and Delta looked a bit, well, weak in that particular comparison. We knew the airline’s revenues were not what they should be, and that was part of the problem. But what else was going on?

Now we know. And we also know that Delta uses a cash management strategy that only one other airline uses. Know what it is? We do. And we share that with subscribers this week.

We talk a bit about British Airways this week. The airline’s flight attendants look like they are going to strike the airline again, former CEO Willie Walsh received a nice bonus prior to moving into his new digs as head of IAG, and the airline is considering an equity investment in JAL.

April Fools Day was Friday and a slew of airlines jumped into the foolish fray. Which airline’s efforts were genuinely funny and which were, well, just plane lame?

We also have our review of the first quarter airline stock performance. Short and sweet? Pretty ugly reading.

All this and more in this week’s issue of PBB. Subscribers can access this week’s issue here.