Monthly Archives: February 2012

PlaneBusiness Banter Now Posted!

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

We are almost done with fourth quarter 2011 earnings. This week we take an in-depth look at the results reported last week by Spirit Airlines and SkyWest Airlines.

I found both calls interesting last week — but for different reasons. Spirit notched the best operating margin of any North American airline for the fourth quarter. That was no small feat. It’s ROIC as nothing to sneeze at either.

As for SkyWest, the financial carnage associated with the airline’s ExpressJet deal continued during the fourth quarter, but there might, finally, be hope for 2012, although SkyWest will report a loss for the first quarter.

By the way, which aircraft that many operators seem to think is so desirable right now in the regional space does SkyWest’s CEO Jerry Atkin think may not be that important in the regional space five years from now? His answer may surprise some.

This week Republic Holdings and Pinnacle are slated to wrap up the sector’s fourth quarter results.

We also spend a lot of time this week parsing the latest bankruptcy filings for American Airlines. In particular, this week we take a look at the airline’s recent request to the bankruptcy court for $12 million dollars. Give or take. The airline wants the money so it can pay the Boston Consulting Group. (Just one of tens of consultants and advisors the airline says it has to have working for it.)

But the request for the BCG money is especially interesting to pick through.

Do you know what “The Cascade Project” is and what it supposedly is going to do for AMR and its management team?

We give you the scoop. We also tell you when BCG first started working with the airline.

I warn you though, if you have a weak stomach for corporate speak and consultant-eze, it may be hard to get down. And keep down.

We may have to force ourselves to parse the bankruptcy filings more carefully on a more regular basis.

Then again, maybe not.

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

PlaneBusiness Banter Now Posted!

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Hello everyone. It’s that time once again. This week’s issue of PlaneBusiness Banter is now posted.

This week we take an in-depth look at the recent earnings reported by both WestJet and Air Canada. On the surface, WestJet easily bested its Canadian competitor in terms of its fourth quarter performance, but WestJet is now in the process of starting a new regional airline. We talk a lot this week about my concerns about this new “WestJet Express” operation.

Meanwhile, how is Air Canada going to increase its revenues? The airline’s problems in that department overshadowed the airline’s cost reduction performance in the fourth quarter. Meanwhile, cost forecasts for the first quarter are daunting.

We also update subscribers on the latest from the American Airlines bankruptcy, and we take a look at what happened to airline stocks last week. Hint: The frenzy of the last few weeks finally came to a screeching halt.

Pinnacle Airlines got some good news last week however — and that news sent its shares soaring. We’ll update you on all that news as well.

All this and much, much more, including a very active mailbag — this week in PlaneBusiness Banter.

PlaneBusiness Banter Now Posted!

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Good evening everyone.

This week’s issue of PlaneBusiness Banter is now posted. And a jam-packed issue it is.

This week we’re talking all things American Airlines (of course), we give you a look at the presentations last week at the Raymond James Global Airline Conference in New York, and of course, we have fourth quarter earnings reports from two airlines to dissect. Both Hawaiian Holdings, parent of Hawaiian Airlines, and Allegiant Travel Company reported earnings last week.

While we have been big fans of the Hawaiian Airlines story over the last several years, and particularly the last year, why is it that I was not that impressed with the airline’s earnings call? A hint: It has a lot to do with what is on the airline’s plate in 2012. Both in terms of revenues and costs.

As for Allegiant, the fourth quarter numbers were good, but the airline continues in the midst of its own transformation plan with seats being added to its aircraft and the carrier’s move into the Hawaiian-West Coast market still yet to launch.

Meanwhile, it was another great week for airline stocks on Wall Street. We tell you who posted double-digit gains for yet another week. (And a good number of airline stocks did just that.)

On the IT front, sources tell us that the HP “JetStream” PSS Extreme Makeover project at American Airlines is done. Not as in “It’s completed.” More like, “It’s done.” Toast.

We hear the project has finally been shelved — after the airline had spent tens of millions of dollars on it with little to show for its investment. In the airline’s bankruptcy filing, the airline said it owed HP some $30 million or so. In fact, HP has a seat on the airline’s unsecured creditors committee. The project was first announced in 2009.

Should be quite interesting to see what the airline does now. Will it crawl back to Sabre and try to work out some type of add-on to its existing Sabre system? Or will this give yet another vendor a chance to wriggle their toes in the door?

Meanwhile, up in New York last week Raymond James held its Global Airline Investor Conference. We’ll give you a peek at some of the presentations that were made by some of the usual suspects.

Malev shuts down, Ryanair moves in, and Singapore Airlines posts a 53% drop in fiscal third quarter earnings — all of this and much, much, more in this week’s jam-packed edition of PlaneBusiness Banter.

PlaneBusiness Banter Now Posted!

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Good evening everyone! This week’s huge mega-earnings issue of PlaneBusiness Banter is now posted. This week we take an in-depth look at the recent earnings results and the earnings calls from Delta Air Lines, US Airways, Alaska Air Group, JetBlue, and United Continental Holdings.

But there’s more.

Republic Holdings announced last week that Frontier Airlines was getting a new executive team and — that the airline was going to become an ULCC.

You know what that is don’t you?

Ultra low cost carrier. Think Spirit. Or Ryanair.

Not sure what all the animals are going to think about this. Not quite sure what we think about it yet — as details are slim. But it appears that either Frontier will be rebranded and operated as a ULCC. Or it looks like it will be rebranded and then sold as a ULCC.

Heading up the new operation is none other than Dave Siegel. Yes, the same Dave Siegel who headed up the old US Airways during the Dark Period. Joining him is the former head of planning and pricing at Allegiant — Robert Ashcroft as SVP Finance. Daniel Shurz, meanwhile, was promoted to SVP Commercial.

Tomorrow employees and union leaders will finally hear from American Airlines — as the airline is slated to roll out its proposed labor contract modifications per section 1113 of the U.S. bankruptcy code. Meanwhile we’ll be interested to more hear details of the airline’s proposed restructuring plan.

It’s going to be one difficult day for American employees.

Meanwhile the head of the Pension Benefit Guaranty Benefit Corp., the government agency that would be forced to take over the administration of employee pensions if the airline walks away from them continued his very public criticism of the airline Tuesday.

The PBGC also placed liens against assets of American on Tuesday. The agency said that it filed over 70 liens for a total of $91.7 million, on behalf of the four pension plans the airline currently has. This comes after American only paid $6.5 million of the roughly $100 million that was due earlier in the month. The airline said that it had to conserve its cash.

We’ll find out more tomorrow on where the pension issue is headed. But one thing’s for sure — this PBGC is not the same as the one United Airlines rolled over when it went through its bankruptcy. Josh Gotbaum, the director of the PBGC, is not going to go down without a fight.

But the big story this week in PlaneBusiness Banter is earnings — lots and lots and lots of earnings. This week’s issue clocks in at over 150 pages as we take an in-depth look at the five airlines that reported in last week. Which airline do we think reported the strongest earnings for the fourth quarter? Delta Air Lines. And I tell subscribers why.

Also, those reports last Friday about how Delta was now possibly looking at a deal for US Airways? We give you our take on those reports and why they shouldn’t surprise anyone. Who is going to do what to whom and why? We’ll break down a number of the possible scenarios.

All this and a whole lot more. Now. In this week’s PlaneBusiness Banter.