Tag Archives: apa

PlaneBusiness Banter Now Posted!

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Good evening everyone!

The first issue of PlaneBusiness Banter for 2013 is now posted. And yours truly is sick as a dog. As a result, it’s going to be a short summary tonight.

I am desperately in need of more tea, more medicine, more chicken soup, and more sleep. Bleech.

However, before I crawl away and climb under the covers, here’s a peek at what we are talking about in this week’s issue.

Taking the top spot of course are the problems with the Boeing 787. The week began with a fire on a Japan Airlines 787 in Boston, and it’s pretty much continued to go downhill ever since. I think it would be safe to say it’s not been a good week for our friends at Boeing.

Since we did just end both a year and a quarter, we have all kinds of airline stock charts for you to peruse this week. Taking the top spot for performance in 2012 were shares of US Airways. The shares picked up a cool 166% for the year.

On the American/US Airways front, we expect we should hear something formal in terms of a merger agreement before the end of the month. My bet is the announcement is made before US Airways releases its earnings. Stay tuned.

This week we talk a lot about Southwest Airlines. Taking the cue from analyst Bob McAdoo from Imperial Capital, we revisit the information the airline released at its recent investor day in December — and we note the airline has already been forced to backpedal on some of its announced increases in fees it made that day.

Like I say, we talk a long time this week about the airline. And not a lot of it is overly enthusiastic.

We also bring you a super secret list of New Year’s resolutions. That’s right. We have the New Year’s resolutions from a number of airline CEOs — both current and past.
As for the AMR Bankruptcy Follies — this week we dissect the “Bob Crandall” video that had so many people talking while we were on Holiday Hiatus.

An American Airlines‘ exec leaves to become CEO of Virgin Atlantic, we give you a look at the messages several airline CEOs sent to their employees at the end of the year, and we even update you on Pinnacle, which, as everyone had assumed, is going to exit bankruptcy as a wholly-owned subsidiary of Delta Air Lines.

All this and more (cough, cough) in this week’s issue of PlaneBusiness Banter.

PlaneBusiness Banter Now Posted!

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We’re baaack!

Welcome back my friends to the show that never ends.

If it’s the week after Labor Day, that means it’s time for us to return to the fold and once again publish PlaneBusiness Banter.

This week we do our best to get back on track and update PlaneBusiness subscribers not only on the most recent industry news and notes, but we give you our take on some events that happened while we were making our way around the Western part of the country while on vacation.

American Airlines bankruptcy — check.

American Airlines CEO Tom Horton’s miscues — check.

APA’s sudden weak-kneed approach to management — check.

APFA’s strong stance on a US Airways merger — check.

U.S. Bankruptcy Judge Sean Lane’s decision on Tuesday to allow the abrogation of the American pilot contract — check.

JetBlue’s brand new New York presence — check

JetBlue’s irritation at Tom Horton and American for continuing to imply JetBlue is in play — check.

US Airways and British Airways sign NDAs and begin due diligence process with American in regard to a merger — check.

United Airlines suffers horrible August — check…and check again.

United Airlines’ systems outage gives @FakeUnitedJeff A Treasure Trove of Material — check.

United Airlines’ systems outage shows airline’s glaring lack of Social Media presence — check.

United Airlines’ systems outage gives Social Media folks at American, Delta and Frontier Airlines a reason to shine — check.

Shares of SkyWest skyrocket in August…we tell you why — check.

Ryanair says it is willing to negotiate on Aer Lingus deal to get approval — check.

All this and more in this week’s issue — check.

Can you tell we’re in our pilot mode this week?

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

Check.

Why American Airlines’ Pilots Need to Vote Yes

To say that I have been bombarded over the last week with emails pertaining to the American Airlines’ pilot TA vote would be an understatement. This is not to say that the voting that is also going on with the airline’s flight attendants and its TWU groups which did not vote for the “last best” TAs are also not important.

But we all know how this works.

The pilot union vote is the one that carries the most clout.

While I already voiced my opinion on this matter two weeks ago in PlaneBusiness Banter, I am going to say it again today — very clearly and very publicly.

If you are a pilot for American Airlines — you have to put aside the emotional firestorm that has erupted over the last several days, a result of an email that was circulated within the pilot group concerning “conversations” and “comments” involving both the airline’s Chief Pilot John Hale and SVP of Operations Jim Ream.

You have to stop thinking that there is a “deal” that is going to happen between JetBlue and American. It isn’t going to happen. Period.

You have to stop thinking that a “yes” vote is a vote in favor of the current management.

You have to stop thinking that leaving your fate to a bankruptcy judge is preferable to the contract that is now up for grabs.

You have to remember that you cannot expect a contract that is part of a bankruptcy process to begin to come close to the contract that the Delta pilots recently ratified, or the contract that the United pilots now have on the table before them. Trying to compare these two contracts to the situation that you are now looking at with American is a case of “magical thinking.”

As Ivan Rivera, Aliied Pilots Association Domicile Chairman put it so well in an email he sent out today,

Setting aside for a moment the “cannon shots” and the I Pads, it is clear that AA management has been in a horrible “state of confusion” to add to their incompetence. Confused and incompetent are not the qualities we need from our management, and this is why our primary goal should be to fight to replace them. Without new management, with vision and competence there will be no long-term future for this airline, regardless of what our CBA’s look like. I know we all want this; we just may disagree on the best way to get it done. We have two options going forward to try to achieve that goal, and each carries it’s own set of advantages and risks. The YES vote endorses APA’s strategy of “strategic and financial” leverage thru the 13.5% claim. The NO vote endorses a more traditional “labor” leverage that, depending on many factors, may result in a “financial” leverage as well. As you know, following all our advisor’s recommendations, I have endorsed the YES vote but I have also presented our options with a NO vote at our MIA Domicile meeting. I’ve also shared with you that I believe APA’s strategy following a YES vote will be the same as for a NO vote: We will continue to oppose the “stand alone” business plan-we will continue to oppose this management- we will continue seek the best path for all pilots and other AMR stakeholders, except our current management of course. However, there are two very significant risks with a NO vote: First is the loss of the economic value and power of the 13.5% claim; and second is the risk of doing irreparable damage to our SCOPE thru the outsourcing of the ERJ190-195 (DC-9 size A/C capable of decimating the bottom of our seniority list).

I agree.

I think the recent actions of management at the airline should only convince pilots even more that the current management team at the airline needs to go.

After all, there is a reason that the pilots at both Delta Air Lines and United Airlines are now looking at contracts that are much richer than the one you are now looking at. It’s called — management teams at those airlines realized years ago what had to be done in order to grow their businesses effectively. They realized that “heft” was necessary in order to be competitive on a global scale.

But voting “no” is not the way to get this management team out of the picture. Nor is it a way to tell the current management team to go F*$% themselves.

In fact, I would argue that a “no” vote makes the situation much more advantageous for the current management team.

I know it sounds contrary. I know it sounds confusing.

But the pilot group will not “win” if the current contract is abrogated.

Finally, if you are foolish enough to think management will come back and “sweeten” the deal if the contract is abrogated– while creditors are breathing down their neck to get as much money as possible out of the airline’s coffers — think again.

But this time think rationally. Not emotionally.

PlaneBusiness Banter Now Posted!

home-typewriter copy 1.jpg Hello everyone. This week’s issue of PlaneBusiness Banter is now posted. This week we take a detailed look at the recent earnings releases from United Continental Holdings, Delta Air Lines, US Airways and JetBlue.

We also see how both Ryanair and Air France/KLM fared during the last quarter.

Meanwhile, we have PlaneBusiness Earnings Summaries posted for Republic, Spirit, Hawaiian and Allegiant. Next week we’ll get you caught up on all the airlines that have reported so far for the quarter.

In breaking news tonight, it does appear that there is a tentative agreement between United Airlines and its two pilot groups. Not a lot of details out there yet, but this is certainly good news for the airline. Clearly the deal will have to be approved by the rank and file and we have no idea what will happen at this point. All we know is that it is good news that an agreement is in place.

United was also in the news this week as the airline rolled out its new beautiful Boeing 787 out in Seattle.

While that was good news, the not-so-good news for Boeing was a test of a 787, slated to be delivered to Air India which saw debris from its engine start a grass fare at the Charleston International Airport. Unlike the Trent 1000s that ANA just had to have work done, these were GE engines.

Allegiant Travel announced this last week that is is going to be taking on Airbus A319 aircraft — some are coming from Cebu, others from easyJet. Looks like this is the first move by Allegiant to begin shifting away from the Maddogs.

Even more airplane news as Delta brings the hammer down on SkyWest (Delta CEO Richard Anderson told everyone — repeatedly– in the airline’s earnings call last week that yes, this could be done. And yes, it was done.)

Airline stocks had a so-so week last week, with shares of United getting hammered. Analysts don’t like it when airlines produce revenue results that lag everyone else.

In the AMR Bankruptcy Follies this week, we talk about Tom Horton’s latest Magical Mystery PR tour and how he sounds just a tad desperate as he attempts now to “reposition” the message. We argue he only makes things worse — both for him and the airline.

Oh, we have a lot more than this to talk about, but this gets us started.

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

PlaneBusiness Banter Now Posted!

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Good evening everyone.

This week’s issue of PlaneBusiness Banter is now posted!

We are a bit late in posting this week — the result of PlaneDad move-related duties. I am happy to report that he is now in his new home in Texas, but the whole process took more time this week and last than I had anticipated.

Hopefully we’ve gotten the most time-consuming issues behind us.

Meanwhile, this week in PlaneBusiness Banter, there are two main stories we’re talking about. One — the reaction of United Airlines to the city of Houston’s decision to allow Houston Hobby to expand — allowing Southwest Airlines and other airlines to fly internationally from Hobby. While we knew this was going to be the city’s decision, even we were somewhat taken aback with some comments made by the airline and its CEO, Jeff Smisek after the city council vote took place.

We talk about what the airline could have done — as opposed to what it did do – in this week’s issue.

We have a new edition of AMR Bankruptcy Follies this week. This week’s we’re talking about Chinese food and mystery meat. I’ll let you guys figure it out.

We also heard from a number of our subscribers about the “Town Hall” meeting AMR CEO Tom Horton conducted last week at the airline’s headquarters. Funny. The entire presentation, particularly the Q&A session contents are not all on the official “Scrubbed” version of the session that the airline has posted for public consumption.

But essentially, I think Mr. Horton needs to be reminded that he is not the one who is going to decide whether American merges with another airline or not, or who that airline may be. That responsibility lies with the bankruptcy court, particularly the Unsecured Creditors Committee.

Etihad broke out the checkbook again last week, while David Neeleman’s Azul bought out rival Brazilian airline TRIP. This also means that SkyWest, which had invested in TRIP will get a payout. Over time.

Will Pinnacle Airlines move back to Minneapolis? Yes — if the folks in Minneapolis have anything to do with it. I also tend to think it will probably happen, as Delta continues to downsize its presence in Memphis.

Oh, and that big sell-off in airline stocks Monday? Don’t pay any attention to it. If you are a savvy investor you saw it for what it was — an overreaction to the Delta May PRASM estimate numbers. But Delta is an exception to the rule. We’ll tell you what two analysts had to say about the situation.

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

PlaneBusiness Banter Now Posted!

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Hello everyone. We just posted this week’s last 1Q mega-earnings issue of PlaneBusiness Banter.

In this week’s jam-packed issue, we have something for everyone. A little AMR, a little Delta, a little United, some more AMR, a little more United, and yes, even a little Republic.

Wrapped around all this are full earnings call reviews of AIr Canada, WestJet, and SkyWest. So yes, you get a lot of Air Canada, WestJet and SkyWest.

In case you haven’t heard, Delta Air Lines and its pilots announced yesterday that the two sides had come to terms on a tentative agreement — seven months in advance of the current contract amendable date.

Bravo.

While we have not seen a copy of the proposed TA yet, we understand that there is one very interesting part of the contract. That part is the one that addresses the flying of the Boeing 717.

Yep, you know where this is going.

In March I broke the story that Southwest Airlines and Delta Air Lines had come to terms on a deal that would see most, if not all the AirTran 717s go to Delta.

Southwest responded very defensively about the report, although the airline never denied it.

The situation is complicated because of the fact the AirTran 717 pilots who agreed to the contract/seniority agreement with the Southwest pilots and that airline agreed to a deal that saw them more or less given a “carve out” in terms of seniority — as long as Southwest flew the 717.

All I can say is that if there is a part of the Delta pilot contract that directly addresses the 717 flying as I hear is the case — this will be interesting to watch.

In other news, we also have this week’s edition of the AMR Bankruptcy Follies. We have a real mixed bag of news and commentary this week. As most of you know, both the Unsecured Creditors Committee and AMR released statements last Friday which, in essence, allowed that the UCC was going to look at any and every potential deal that might involve American in an effort to maximize creditor and bondholder’s potential return.

American wasn’t too enthusiastic about the decision of the UCC, but they really don’t have any control over the UCC.

We also talk this week about the March DOT Performance numbers. As we had expected, United Airlines took a big hit in terms of on-time performance, lost bags, and complaints. On the flip side, US Airways did very well in March.

Airline stocks also had a good week last week. Shares of United Airlines took top honors. We’ll tell you why.

We also review the recent earnings news from Singapore Airlines, which was surprisingly bad, and IAG, parent of British Airways and Iberia. LAN also reported this last week.

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

PlaneBusiness Banter Now Posted!

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Good evening everyone.

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

This week we have another mega-earnings issue, as we take a close look at the recent earnings calls from Hawaiian Airlines, Allegiant Travel Company, Spirit Airlines and Republic Holdings. Republic was the only one of the group not to post a profit for the first quarter.

Of course Spirit was in the news last week for other reasons — namely its decision to hike the charges for carry-on bags and for their initial refusal to refund a $197 ticket to a terminally-ill ex-Marine. By the time the week was over, the bag charge increases were still in place, but the airline’s CEO Ben Baldanza personally refunded the cost of the ticket and the airline contributed $5K to the Wounded Warriors organization.

For once the airline discovered that bad publicity was not better than no publicity.

In other news, Southwest Airlines and United Airlines slugged it out again in Houston Tuesday before an overflow crowd at the Houston City Council chambers.

Southwest wants to fly internationally out of Hobby Airport, and has asked the city for permission to build a new international addition to the current airport at a cost of roughly $100K.

But United is not amused. Especially since it just broke ground in January on a $700 million expansion and improvement of its facilities at IAH, which will include more international gate expansion.

Most interesting factoid from Tuesday’s testimony and questioning — on the day United Airlines broke ground on its new IAH expansion in January, Southwest’s Gary Kelly was talking to the Houston mayor about its desire to fly internationally out of Hobby.

Oh, this is such a cruel dog-eat-dog business.

This week we also have our latest AMR Bankruptcy Follies column. This week we look at the position of the bondholders in the bankruptcy process — why they want to get as much as possible back from the airline and how this return could be maximized as a result of a US Airways merger with American while it is still in bankruptcy protection.

Last week shares of Republic and Spirit were the laggards for the airline sector, but the price of oil plunged. That’s good news. So far this week — oil prices have continued to move downward.

As always — all this and more — in this week’s issue of PlaneBusiness Banter.

American Airlines Bankruptcy Proceeding Begins

It’s a packed house in Manhattan this morning as U.S. Bankruptcy Judge Sean Lane opens up the airline’s Section 1113c hearing.

Apparently the crowd is so large, they have opened up two “overflow” rooms.

I am not in New York. I am in the lovely confines of Slidell, LA, just outside of New Orleans, where my Dad is now in the hospital, awaiting transfer into a physical rehabilitation program, after suffering three falls in one week.

But fear not.

The intrepid Terry Maxon, reporter for the Dallas Morning News is on the ground there, as is Scott Mayerowitz with the Associated Press.

Scott is the more prolific tweeter of the two. Terry — he’s still getting used to the Tweetie thing.

Scott can be followed at @globetrotScott

But I would strongly recommend you follow Terry’s blog posts. You can find them here.

We also have a couple of folks on the scene (our stellar cast of PlaneBusiness undercover correspondents) and if we hear any particular tidbits of note, we will tweet them. If you don’t follow us on the Tweetie yet, our account is @planebusiness.

Speaking of, what do you think Captain Dave Bates, president of the Allied Pilots Association, thought, when he realized Terry was on the same plane to New York as he was on Sunday?

Surprise!

You can read Terry’s comments about their short “leaving the aircraft” interview here.

Good read. I continue to be impressed with Dave Bates and the way in which the APA has handled themselves over the last few weeks. No histrionics. No union/management posturing. No “looking toward the past.” Just a very methodical and business-like way of approaching the options in front of them.

What a refreshing and, I would add, much needed change.

Captain Bates and I spent some time together when we were both at the recent Phoenix Sky Harbor Airline Symposium . I came away impressed with his take on the situation then. I remain impressed.

PlaneBusiness Banter Now Posted!

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Hello everyone.

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

This week we are talking a lot about — what else? American Airlines and whether the airline should continue in its attempt to come out of bankruptcy as a standalone carrier. Or if, perhaps, it should listen to what many Wall Street analysts are saying, what we are saying, and what a lot of employees believe — that a merged entity would provide a better opportunity for the airline.

Not only that, but an agreement pertaining to a merged entity would then allow the airline to use bankruptcy to tailor the airline more effectively. And efficiently — taking into account the much larger airline that would be created.

This last week the airline and its handlers definitely went on the offensive as it attempted to sway opinion using old-school PR tactics. The attempts didn’t gain much traction, and we talk about why they didn’t. Short reason: you just can’t do that kind of stuff today and expect it to hold up. Times have changed.

In addition, the unions at American came out with their own missives last week, including one in which it implored politicians who don’t know what they are talking about to not comment on anything to do with the bankruptcy. Until all the facts are known.

I have never seen all three major unions at a bankrupt airline appear to be so in synch in a situation like this. Not a good thing if you are Tom Horton. I don’t think his recent exhortations to the pilots to “put the war paint on” had its intended result. In fact, I think it backfired.

Monday, all interested parties will be in bankruptcy court in Manhattan. From that point on, the timing is a bit nebulous, but if I were to guess, I would guess that US Airways will need to come forth in some fashion next week, if it is indeed serious in making an attempt at a merger.

American is slated to open up the hearing Monday with their side of the story, followed by presentations from the airline’s three unions. But that schedule may not be followed. Stay tuned.

But there was a lot of other news last week, including a standing-room only crowd down in Houston, where the Houston City Council took their first stab at a decision on whether or not Southwest Airlines should be allowed to fly internationally out of Hobby Airport.

As I say in this week’s issue, you rarely see consultants’ work so publicly ripped to pieces as members of the Council did this week. But that’s exactly what happened. They’ll be a rematch in about two weeks, at which time United Airlines will present its side of the story, and its study.

Speaking of Southwest Airlines, we hear that the airline should announce a new IT deal on Thursday. Or as one of our SWA friends put it in an email, “The ranking of the airline’s priorities has apparently changed.”

PBB subscribers will get the joke.

We had news this last week of yet another CFO departure, and late today, we heard that there will be another CEO departure in the next couple of months.

We also had an analyst change addresses.

Change, change, and more change.

That was certainly true with this month’s DOT Air Travel Consumer Report. The March numbers had a brand new denizen at the top of the on-time departure and lost bags rankings — Virgin America.

Meanwhile, on Wall Street, airline stocks were a bit down for the week, as was the market as a whole. Jet fuel rose modestly for the week.

Finally, my apologies for the delay in publishing this week, but we had an incident involving PlaneDad that kept us more or less occupied all day Monday and somewhat on Tuesday. He fell. No phone was accessible. He lives alone. He’s 92. Seventeen hours on the floor. He’s now in the hospital. Yours truly will be returning to New Orleans later tomorrow. You get the picture.

And yeah, it’s not a particularly pretty one.

Sigh.

On that note — go read this week’s issue of PBB. And if you are not a subscriber — why not?

PlaneBusiness Banter is Now Posted!

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Good evening everyone. It’s time once again for this week’s issue of PlaneBusiness Banter. Or rather, this week’s “Turkey Trot” edition of PBB.

Yours truly got hit by a nasty upper respiratory infection this last weekend, so I have to tell you — the “Turkey Trot” edition almost didn’t make it to the table.

But I couldn’t have all our subscribers venturing out over the river and through the woods without some good reading material.

This week we’re talking about a hodge-podge of things — lunatic legislation introduced just in time for Thanksgiving travelers that seeks to either prevent airlines from charging for fees, or then taxing airlines more that do charge for fees; a USB investment research report that pretty much calls the EU’s Emissions Trading Scheme worthless; American Airlines’ withering market cap; American Airline’s withered state in general; SkyWest’s new flying for US Airways; Travelport and American’s latest court news; one analyst’s take on the latest Southwest Airlines‘ schedule uploads for 2Q2012, and what these changes mean for competitors; Hawaiian Airlines’ decision to take Manhattan; the DOT’s September Airline Consumer Travel Report; and oh, a whole lot more.

Subscribers can access this week’s issue here.