This week’s issue of PlaneBusiness Banter is now posted.
This week we talk about a lot of stuff — including the fact that 3Q13 earnings are right around the corner. We are hearing very bullish comments from both analysts and airline folks about what we should see when the numbers roll out next month. Delta, in particular, looks like it is going to announce very strong 3Q13 earnings.
However, it looks like once again, United Airlines is going to lag its peers in terms of earnings and margin performance. We’ll have to wait to see.
This week we talk about whether or not the fact that United Airlines has a lack of dominance at its hubs (compared to Delta Air Lines for instance) is negatively affecting both revenues and costs. Hunter Keay, analyst with Wolfe Research, talked about this last week in a research note. We think he’s onto something.
In other news, U.S. Bankruptcy Judge Sean Lane approved AMR’s plan of reorganization last week, but the approval is contingent on the DOJ signing off on the deal. Judge Lane also refused to allow American Airlines‘ Chairman and CEO Tom Horton’s $20 million severance to be part of the reorganization plan. This means someone else is going to have to okay the payment.
Meanwhile hundreds of employees of both American and US Airways were in Washington today to lobby members of Congress on why the merger should be allowed to take place.
On the aircraft front, this week was simply stellar for those of us who like to watch brand new shiny airplanes take flight. We saw the maiden flights of both the Boeing 787-900 and the Bombardier C-Series 100 this week. If the Bombardier can come anywhere close to its projected fuel savings and engine performance (and we should start to get some real answers in about 6 weeks or so as flight testing continues) I think the company has developed a very viable player in the smaller jet segment.
But you know how it goes. Airlines are always reluctant to jump to a new player — especially when it is not part of a larger family of aircraft.
While we were on vacation, I am happy to report that energy prices more or less remained stable. Meanwhile, last week was a great week for airline stocks, as the inclusion of Delta Air Lines in the S&P 500 lifted the entire sector. Delta becomes the second airline in the index. Southwest Airlines is the second.
All of this, and much, much more, including a surprise departure announcement from a major airline CEO — in this week’s PlaneBusiness Banter.