Monthly Archives: March 2012

PlaneBusiness Banter Now Posted!

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Hello earthlings.


Yes, I know. We’re one day late this week.

As PlaneBusiness Banter subscribers know — sometimes our publication times are, er, flexible.

Besides, I have a good excuse.

This week we’ve got the latest on the continuing and somewhat stranger-by-the minute tale of the Southwest/AirTran 717s, and the airline’s response to the report we posted last week about the airline selling some if not all of them to Delta Air Lines.

We also, unfortunately, talk about the JetBlue Captain who apparently went nuts at 35,000 ft. yesterday. The Feds have released the formal complaint and affidavit on the incident. Makes for some chilling reading.

From a personal perspective, it’s very sad and troubling. The pilot was one of the airline’s most senior pilots, a Check Airman — and, as I realized when I read the complaint, he had been a recent subscriber to PBB.

How did the airline handle the situation? We’ll talk a bit about that.

Shifting gears, last week was a huge week here in the Valley of the Sun where I am still happily hitting the computer keys. First it was the ISTAT Conference. Then Wednesday it was US Airways Media Day. Did CEO Doug Parker give us all the juicy details about what they want to do with American Airlines? Not hardly. But it was a worthwhile day nonetheless. I’ll tell you why.

Thursday and Friday, the Phoenix Sky Harbor Airport held its annual International Airline Symposium and this year the airport, along with Oliver Wyman, put together an impressive list of participants, including IAG Chairman and British Airways former CEO Willie Walsh.

American Airlines’ Will Ris brought the house down Friday afternoon as he called out to Willie from his place on the platform, “So Willie, is that your checkbook in your pocket or are you just glad to see me?” Surprisingly, Walsh began waving a checkbook around for all to see.

Later on, during the CEO panel, Walsh commented, “It’s one thing when a competitor is in bankruptcy, but it’s another thing entirely when it’s your partner.”

Yes, isn’t it?

The event also was the first public appearance of former ALPA President and former FAA Administrator Randy Babbitt. Randy gave an excellent speech Friday, wearing one of his legendary Hawaiian shirts, and the crowd gave him a standing ovation. Randy is one of our favorite people. We’re glad he’s back. And we’re glad he wasn’t in a shirt and tie.

I hung out with Nick Calio and Jean Medina from Airlines for America last week. In fact I hung out with them a lot. All three events during the week. And cocktails. And dinners. And lunches.

I like Nick. I think he is a much needed breath of fresh air in an organization that has needed it for a very long time.

ALPA President and PlaneBusiness Banter Lounge Lizard Interviewee Lee Moak was also in attendance at this year’s Symposium. We got to spend some time with him, as well as APA’s President Dave Bates. Yes, there were, as you can tell, more than a few pilots in the house.

In addition to all this, we have a great PBB Brown Bag Analyst Guest Column this week. The question he poses: Is Air Canada too big to fail?

We also have this week’s edition of the American Airlines‘ Bankruptcy Filing Follies.

Yes, the mega-issue of PlaneBusiness Banter from the desert is posted. Finally! Next week we can get back to normal!

PlaneBusiness Banter Now Posted!

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Hello everyone.

This week’s issue of PlaneBusiness Banter is now posted. In this issue we talk about this week’s ISTAT Conference that was held in Scottsdale. Can airlines find financing in the capital markets? What about the European banks — are they completely out of the loop now? Asian banks — are they stepping up to the plate?

What is the biggest challenge to an airline treasurer these days?

Then of course the Airbus/Boeing competition was in full swing, with dueling presentations. Both sides used information that was not directly comparable, so trying to figure out just who is better than whom was almost impossible. But it was good theater.

But probably not as good theater as watching the engine manufacturers go at it.

In case you have not been paying attention, the engine manufacturers are the ones who are responsible for coming up with new products that are substantially more efficient. Why? Higher fuel prices. And I do think that perhaps the competitive undertones that once could sense between the folks from CFM, Rolls-Royce and Pratt &Whitney were more nasty than the usual Airbus/Boeing cat snarls.

Are Boeing and Airbus production rates too high?

We let you know what the folks at ISTAT thought.

It is a requirement that airlines make money? One aircraft lessor argues no, it isn’t.

Which widebodied aircraft did most ISTAT attendees say they would like to own?

Who upstaged Air Lease Corp’s Steve Hazy on the aircraft lessor’s panel?

What is the current update on the cargo market? (Hint: It’s not positive.)

Anyway, you get the picture. We love the ISTAT Conference each year. It is the closest thing this country has to an Air Show. It has all the same people — just without the chalets and the aircraft.

We also have a new American Airlines’ Bankruptcy Filing Follies column, we take a look at how the usual suspects fared in the most recent DOT Air Travel Consumer Report (and welcome Virgin America to the group that reports each month) and we look at some recent stock action in share of Pinnacle.

All this and much, much more in this week’s issue of PlaneBusiness Banter.

PlaneBusiness Banter Now Posted!

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Hello earthlings. This week’s edition of PlaneBusiness Banter is now posted. This week we take a long look at the latest goings-on with the American Airlines‘ bankruptcy; we update you on why we think not all the bitching and moaning about problems with the United cutover to SHARES is a function of IT malfunctions, but rather of planned changes; we talk a bit about the presentations that were made Tuesday at the JP Morgan Airline Conference, including what US Airways learned from its failed bid to takeover Delta Air Lines, and yes, we talk about Southwest Airlines a bit this week as well.

Laura Wright, Southwest’s CFO, told investors at the JP Morgan conference Tuesday that the airline will post a loss for the first quarter. She also addressed a question from an investor about a huge pet peeve of ours — the airline’s apparent continued inability to upgrade its IT systems. A case of priorities? Maybe the airline needs to readjust its priorities.

We also have another edition of our “AMR Bankruptcy Filing Follies” this week. This week the new consultant to go to court and ask for money as part of the airline’s bankruptcy restructuring is….McKinsey. We give you our irreverent and opinionated take on the consultants’ 18 page filing to the court.

On the earnings front, we summarize the year end numbers from both Lufthansa and Air France/KLM, and then there is February traffic numbers for the North American market.

Speaking of Lufthansa, the airline’s deal to sell bmi to IAG, parent of British Airways, has hit what appears to be a small bump in the road. And no, that bump is not Sir Richard Branson’s backside. The EC wants more time to consider the deal, and reports said late Tuesday that IAG was willing to offer up some concessions. What concessions is IAG offering up? Nobody knows.

And what about this situation with China? The country seems determined to punish Airbus for the sins of the European Union and its insistence that all airlines that fly to Europe participate in its Emissions Trading Scheme program. Can the IACO come in and take control of this situation? Will it make a difference?

Last week airline stocks had a reasonably good week, but between rising fuel prices and some not-so-hot traffic and RASM estimates from a few of the usual suspects, the angst did take a toll as most U.S. airline stocks ended up in the bottom tier of the lot for the week.

Speaking of traffic, we have all the traffic numbers from February for you to take a look at as well.

All this, and a lot more, in this week’s issue of PlaneBusiness Banter.

PlaneBusiness Banter Is Now Posted!

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

In this week’s issue we take a look at the fourth quarter earnings results from Republic Holdings, parent of Frontier, Chautauqua, and Republic Airways. The airline rolled out Frontier’s new CEO on the earnings call last week. Some of you may remember him. His name is Dave Siegel. Yes, the same Dave Siegel who used to be the CEO at US Airways.

While the airline’s financial reports remain a struggle to dig through, the good news is that Frontier made a profit for the fourth quarter. Those dramatic cuts in capacity have helped the airline’s profitability tremendously.

But just when we thought it might get easier to dissect the financials of the company, Republic announced last week it was changing the way they report the various components of its operation. Sigh.

This last weekend was a huge weekend for United Airlines as the airline formally moved over operations of both United and Continental onto the Continental SHARES PSS platform. How did the airline do? Not bad. It certainly wasn’t smooth sailing, but none of these cutovers ever are. By Tuesday morning, most of the boarding pass and kiosk issues had been taken care of, most passengers were seeing their miles and itineraries appear in their new FF accounts, and operations were running with many fewer delays.

We talk about what issues remain with the cutover in this week’s issue.

On another front, we had a veritable slew of personnel shifts in the financial side of the industry last week. CFOs moving from here to there, airline analysts taking jobs with airlines, and other airline analysts moving up. We explain all of these, and tell you why we think the two moves that Delta Air Lines made were very good ones.

On the American Airlines front, there was no movement to report between the unions and the airline last week. The airline said on its restructuring blog that it was “disappointed” there wasn’t more progress this week at the negotiating table.. “

I don’t think the unions quite see it the same way.

The airline also announced its equivalent of Economy Plus — I have high hopes the airline will market this effort a hell of a lot better than it did its previous expanded leg room product some 10 years ago. I never though the MRTC program was ever effectively marketed.

The airline sector staged a nice comeback last week, after the drubbing it took the week earlier, most as a result of lower oil and jet fuel prices. Who did well, who didn’t and how low did shares of Air Canada go?

We also have some great letter this week in the PBB Mail bag.

That’s it for now folks. All this and more in this week’s issue of PlaneBusiness Banter.

PlaneBusiness Banter Now Posted!

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Hello all!

Whew. It’s late! Or maybe it’s just very early.

Whatever way you’d like to look at it, this week’s issue of PlaneBusiness Banter is now posted.

Last week we thought we would have had fourth quarter earnings from Pinnacle Airlines to discuss this week, but the airline notified us last week that the information in Thomson concerning its reporting date was not correct — even though it had been recently updated. In fact, the regional airline that is desperately attempting to stay out of bankruptcy says it does not know when it will report fourth quarter numbers.

In addition, Pinnacle said in an SEC filing Wednesday that it has canceled its shareholder meeting, which had been scheduled for May. The airline did not set another date.

Meanwhile, Republic Holdings released their fourth quarter numbers late Wednesday, and the airline is scheduled to hold its earnings call later today (Thursday.)

So we will have our usual in-depth look at that call and those numbers in next week’s issue.

This week we talk a lot about AMR — as the company was in bankruptcy court Wednesday. Did the bankruptcy judge allow the company to hire its laundry list of advisors, consultants, and attorneys? We’ll talk about that decision by the judge, along with the fact that the airline is apparently going to use yet another consultant, not Boston Consulting Group, to come up with strategic plans for American Eagle.

That means the airline will have one consulting firm working on the mainline operation and another working with Eagle.


The other consulting group? Bain.

Meanwhile, this week the pilots union at American sued the airline, claiming that its negotiations with the airline should be conducted not under Section 1113, but under the auspices of the Railway Labor Act.

Meanwhile, on Wall Street, the stocks we track at PlaneBusiness posted the worst week of the year last week , as traders got more nervous the higher jet fuel prices climbed.

United Airlines attempted a fare increase last week — but by Tuesday of this week it was clear band the rest of the discounters were not going to bite.

IAG, parent of British Airways and Iberia, reported earnings this week. How did the airline holding company do? We’ll tell you.

And finally, yep, we’ll tell you the details from our adventure with Oscar on Sunday. Yes, that Oscar. Red carpet and all. That’s the reason we are a little later than usual this week. But you know what — it was worth it!

All this and much more — in this week’s issue of PlaneBusiness Banter .