Tag Archives: airline CEO

PlaneBusiness Wild Turkey Award for Airline Management Excellence

Next week — for only the third time in 14 years — I will award an airline CEO with the PlaneBusiness Wild Turkey Award. This award is given to an airline CEO in recognition of their excellence in airline management.

Yes, the award is named in honor of Herb Kelleher, former Chairman and CEO of Southwest Airlines.

What does it take to grab one of these (and the case of Wild Turkey Rare Breed whiskey personally delivered compliments of the award’s namesake?)

*A dedication to a strong balance sheet.

*An emphasis on a company’s employees and the importance of their contribution to the company.

*A position of leadership within the airline community.

*A willingness to take risks — in an effort to improve an airline’s financial and operational success.

*Above all — a commitment to “do the right thing” in regards to the airline, employees, shareholders, and customers.

That’s next week — in PlaneBusiness Banter.

PlaneBusiness Banter Now Posted!

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Hello earthlings.

Subscribers to PlaneBusiness Banter can access this week’s issue here.

What are we talking about in this — our last mega-earnings issue for the quarter?

Well, obviously we’re talking about earnings. This week I grouped the three remaining regional carriers together — SkyWest, Pinnacle and ExpressJet.

While institutional investor interest in the regional sector is understandably less than enthusiastic, I still found it interesting to listen to the calls from the three airlines. Clearly SkyWest is obviously the dominant carrier of these three, and the airline ended the first quarter with more than $700 million of cash in the bank. Gotta love it.

But even SkyWest has had to become creative over the last several years — as the major airlines keep trying to cut, cut, and cut some more costs from their regional airline contracts.

Regional airlines, in turn, have been forced to get creative.

Nowhere have those efforts been more obvious in this group than with ExpressJet. The airline has dabbled in the corporate charter business, it started its own branded operation, and now it’s struggling to keep the doors open while saddled with a big chunk of convertible debt that is coming due. The airline also paid some nice fees to United Airlines — in return for United throwing some business in its direction.

As for Pinnacle, it didn’t have a particularly good quarter. CEO Phil Trenary said that it was one of the worst he had ever experienced — in terms of the weather-related costs to the airline.

Mekong Air? Heard of it? Apparently Jesup & Lamont analyst Helane Becker has as she grilled SkyWest CFO Brad Rich about the airline’s potential involvement with it.

While Brad was not forthcoming with much information, other reports suggest that SkyWest is, in fact, behind the new start-up.

In other news we talk about a lot of labor issues this week — and of course that includes the situations at British Airways, American, AirTran, and Spirit.

A reminder: The 30-day cooling off period for the pilots at Spirit ends on June 12. A strike here could be nasty — as Spirit does not have the deepest pockets on the planet.

On Wall Street it was ugly for airline stocks last week. This week hasn’t started off all that well either — although a bullish JP Morgan analyst note this morning seems to have lifted the sector. Shares of US Airways seem to be enjoying the nicest ride today — a result of both a positive comment from JP Morgan and because of a note from Avondale Partners in which analyst Bob McAdoo discusses the reasons why an American/US Airways deal would make sense.

Which reminds me. I’ll be talking a lot about mergers. And potential mergers — in next week’s issue.

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

PlaneBusiness Banter Now Posted!

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Hello everyone.

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

So who do we dissect this week?

Republic Holdings.

I’ll be honest. I’m still on the fence with this attempt by Bryan Bedford and the Republic management team to cobble together a new airline out of discarded parts of Midwest and Frontier Airlines.

I was hoping that this quarter we could get more visibility from the airline’s earnings results as to how the grand experiment is faring — but while Wall Street apparently liked the airline’s results (the airline’s stock led the sector this last week picking up a cool 14%), I didn’t hear anything that really won me over.

So — call me “continued skeptical.”

Had to snicker when the airline talked about how it was “harvesting synergies” of the Midwest/Frontier combo. “Harvesting synergies”…..fine example of corporate speak.

That kind of stuff makes me break out in hives.

We had one other regional airline report earnings this last week and that airline was ExpressJet. If you look only at the airline’s net profit numbers, it would appear that the airline did pretty well for the quarter. But no — the reason the airline posted a profit was because of a huge both cash and non-cash tax issue. The airline posted a $17 million operating loss — that was also a clear indicator that no, this was not that good of a quarter.

Meanwhile, the airline remains without a permanent CEO. You may recall that the airline’s CEO Jim Ream left the airline effective Jan. 1 — as he took the SVP of Maintenance and Engineering gig at American Airlines.

The weather certainly created a whole slew of new cancellations last week for many of the U.S. carriers. Adding to the pain of the New York area airspace – the longest runway at JFK International was officially shut down today — as the airport prepares to rebuild and widen it. It will be closed for four months.

I know. Let the fun begin.

On the economic front, it was another yin-yang week for economic tea leaf reading, but on the airline economic/RASM front, analysts continue to fall all over themselves about just how great year-over-year RASM numbers are going to be for the next 3-4 months.

Or as JP Morgan analyst Jamie Baker said at one point, “If it flies, buy it!” Actually Jamie acknowledged last week that he is not quite that bullish now — but tonight we should get our first glimpse of higher RASM numbers — as Continental rolls out its February traffic report.

All this and more, including Japan Air Line’s horrendous loss, Air New Zealand’s nice profit, Aircell’s win at Alaska Air Group, fighting flight attendants, a new high-end, but reasonably priced crash pad for pilots in Houston, and more in this week’s issue of PlaneBusiness Banter .