Tag Archives: Boeing

PlaneBusiness Banter Now Posted!

home-typewriter copy 1We’re baaack! No more vacation for us.

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.

 

PlaneBusiness Banter Now Posted!

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Good evening earthlings!

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

Three guesses what we are talking about this week? (The first two don’t count.)

That’s right — the American Airlines/US Airways merger.

We’ll give you our take on what was announced, what was said that we don’t think is necessarily true, and why we think it’s still a great move not only for American Airlines and US Airways but for the U.S. domestic airline industry in general.

Oh, we talk about the situation at Boeing too. Anyone want to bet as to whether the FAA allows Boeing to put in a “fix” to the battery problem while investigators here and in Japan continue working to find reasons for the two battery issues that occurred in January?

I don’t think the FAA will do it, but apparently Boeing is going to make the pitch on Friday that a different battery design will prevent such things from happening again.

We talk a little bit about earnings this week, as we give a short and sweet summary on the recent results announced by both SkyWest and Spirit. More on the results from both airlines in next week’s issue.

We also look at the pre-announced earnings from Lufthansa.

But the most surprising news this week concerns the bankrupt shares of AMR, parent of American Airlines. As was announced last week, equity shareholders are going to receive a return on their equity investment. Late Wednesday night, JP Morgan analyst Jamie Baker issued a note in which he initiated coverage on the shares again. We’ll tell you why he thinks investors might want to take a look at the shares.

I know. Who would have thought?

Pigs have flown.

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

PlaneBusiness Banter Now Posted!

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Hello everyone!

Oh my, oh my! It is rather exciting in the DFW Metromess tonight. Reports indicate that the UCC, and the board of directors at both American Airlines and US Airways have approved a merger between the two airlines.

Whew. Finally!

We should see a formal release around 7:30 in the morning, an analyst call after that, and a press conference at DFW International at 10 AM. At some point later in the day the members of the US Airways’ management team will fly back to Phoenix for a press event there.

Details leaked this afternoon indicate that the deal is pretty much what we have outlined previously in PBB – a 72/28 equity split, current US Airways Chairman and CEO Doug Parker will become CEO of American Airlines, the headquarters will be in Dallas.

However, it does appear that while current AMR Chairman and CEO Tom Horton will stay on in a non-executive role — his stay will be much shorter than the 2-year period that had been rumored a couple of weeks ago. Sounds like he may stay only into the early part of 2014.

Happy Valentine’s Day!

But hey, we have a lot of other things we are talking about in this week’s issue of PlaneBusiness Banter. We have complete reports on the recent fourth quarter earnings reported by Air Canada and WestJet. We also take a summary look at the numbers from both Ryanair and Singapore Air.

We also have the December 2012 and full-year DOT Air Travel Consumer Report rundown.

In addition, we spend a lot of time this week talking about Boeing. And dendrites. And Dr. Goodenough.

No, I’m not making this up.

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

PlaneBusiness Banter Now Posted!

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Good evening sports fans, airline fans, and Boeing 787 meltdown fans.

No, it has not been a good evening for the 787, as both Japan Air Lines and ANA have now grounded their 787 fleets after yet another “battery” incident that necessitated an emergency landing by an ANA aircraft earlier this evening in Japan.

Before this latest development, we had already devoted a fair amount of ink this week to the Boeing 787 problems — including the investigation into the systems and design of the aircraft, which was announced Friday by the FAA.

We also update readers on the NTSB investigation of the fire last week on the Japan Airlines 787 in Boston. And no, those pictures of the burned out Lithium battery are enough to scare the you-know-what out of you. Especially when you factor in the news that it apparently took 40 minutes for fire fighters to finally put out the fire.

Other than continued scary moments with the 787, we also talk a bit this week about the American/US Airways merger — which seems to be inching forward, although we hear the diehards at AMR refuse to give up on the misguided idea that a standalone deal would be preferable, so an announcement may not be as close as we had estimated.
Some people just refuse to accept the fact the world has changed.

Shame.

Meanwhile we all know how this works. Giving up valuable turf is never easy.
Just ask the guys at APA who are obsessed with what their seniority number is going to be. Nothing else matters.

On the international front, Alitalia needs money again, and Kingfisher continues to operate. Kind of.

Meanwhile, German authorities say that Ryanair has been cheating it out of lots of money, by under-reporting landing weights. This one should be interesting to see how it plays out.

We have the November DOT Air Travel Consumer Report this week, plus December traffic and RASM estimates (what the hell happened to Spirit in the fourth quarter, speaking of RASM) and we tell you why we think 2013 is going to be one heck of a good year for the industry.

All this and 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. We are a bit long this week, but not surprising. There is a lot of stuff going on, including the continued operational issues at American Airlines.

Then again, the American story took another turn over the last week, after the airline suffered at least three incidents in which seats on an American 757 came loose while in-flight.

We talk at length this week about how the airline botched the handling of the story, how the airline continues to get beaten up in the press, and why all of this just validates what we already knew –the management team at the airline needs to change.

I’m not sure how much longer all of this is going to continue, but apparently Tom Horton has dug in his heels and is committed to walking away with what some folks have estimated could be as much as $60 million in bankruptcy exit payouts.

Ridiculous.

Meanwhile, United Airlines has quietly rolled out is new easy-peasy customer service GUI that alleviates the need to go back to the green screen. Everything we hear about the switch has been positive. Would have helped if the airline had done this six months ago, but what the hey.

Speaking of United, CEO Jeff Smisek was on CNBC last week talking about the airline’s new 787s, er, the “game-changer.” I have officially banned the use of that word again. I think it’s become a parody. I don’t want any United execs to use it again.

Time to come up with a new marketing tag. That one has gone stale. Causes acute rolling of the eyes of customers and employees alike.

Delta, United, and US Airways all updated their September PRASM numbers and their 3Q results over the last week. US Airways and Delta should still post a small uptick in PRASM for September, but the increase is going to be less than forecast. As for United Airlines, the airline looks like it continued to underperform its peers by a significant margin in September — and it looks like the airline will do the same for the quarter.

Meanwhile, analyst 3Q estimates for US Airways were raised substantially today as the airline forecast lower fuel prices and lower maintenance costs than expected.

We answer a number of subscriber questions this week on AMR — subscribers can send us any question they want to have answered. We’ll try and print as many as we can each week.

Some labor news from the last week: We’ll talk about both the flight attendants and the pilots at US Airways.

We also run down the 3Q airline sector stock performance results this week — as well as our normal weekly look at which stocks fared well last week and which ones took a vacation.

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

PlaneBusiness Banter is Back!

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Hello everyone. It’s time once again to jump into the fray. Our Holiday Hiatus is over. Time to close out the story on 2011 and start the story of 2012.

The first issue of PlaneBusiness Banter for 2012 is now posted.

This week we talk a lot about airline stocks. We look at how they performed for the last week, the last month, the last quarter and the last year.

The good news? The sector posted a huge fourth quarter. Not so good news — yearly stock performance numbers were horrible. But hey, the quarterly numbers are much more important.

In addition, contrary to a number of wire service and financial news site headlined “end of year” airline stock stories that are floating about the Internet — we tell you which airline stock really posted the best return to investors in 2011.

And no, it’s not Alaska Air Group — as many stories say was the case.

We also update subscribers this week on the American Airlines bankruptcy. The airline is starting to announce route changes, and has announced some fleet news. But, as Deutsche Bank analyst Michael Linenberg reminded investors in a note last week, timing for the airline’s Section 1110 filing the end of this month means that we should hear a lot more from the airline in the next 2 1/2 weeks concerning which aircraft the airline wants to keep, which ones it wants to walk away from, and which ones it wants to renegotiate with lessors.

On the traffic front, December RASM estimates from those airlines that supply such things are coming in mixed. We tell you who has reported better than expected RASM performance, and who has disappointed.

Following up on traffic — a reminder. Airline earnings reports for the fourth quarter and year-end will begin to roll out in a little over a week.

Both JAL and Hong Kong Airlines are talking about potential IPOs in 2012, while Lufthansa was apparently just pulling Virgin Atlantic’s strings over bmi. The German airline finalized a deal with IAG, parent of British Airways for the airline, er, slots over the Christmas holiday. Not surprisingly Sir Richard says he is going to continue the fight to keep BA from getting its hands on bmi’s slots.

Unfortunately I don’t think his screams are going to matter to UK regulators.

On this side of the Atlantic, flight attendants for AirTran and Southwest announced a seniority agreement right before Christmas — good news for the airline.

Did Boeing meet its 2011 delivery goal? No.

How many more aircraft did Airbus deliver in 2011 than Boeing?

Are those “tiny” hairline cracks that have been found in the wing assembly of the A380s really a safety issue?

All of this, and a lot more in our first issue of the year.

If you aren’t yet a subscriber to PlaneBusiness Banter — why not? Find out how you can become one here.

PlaneBusiness Banter Now Posted!

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

This week I talk a lot about US Airways. For good reason. I attended the airline’s “Unplugged” Media Day last week. The airline used the occasion to announce it is upgrading its regional airline fleet with first class cabins. But that was not the only news to come out of Tempe. We’ll give you the low down.

That doesn’t mean we’re done talking about Southwest Airlines and its recent fuselage problem. Nor have the late night talk show hosts.

Last week Southwest Airlines CEO Gary Kelly and American Airlines CEO Gerard Arpey both sat down with Terry Maxon from the Dallas Morning News at the SABEW Conference in Dallas. Gary talked about the Southwest incident and Gerard talked about the recent bogus offer to buy the airline from that outfit in Florida. Yes, as we assumed, the SEC is looking into it.

Speaking of Dallas, the DOT reported its February Air Travel Consumer Report last week. As expected, it was not a good month for airlines based in Dallas. (February ….ice…snow…Superbowl on ice.)

Expedia and American Airlines kissed and made up this week. But this news leaves a lot of very ragged and messy things to clean up on the corporate travel terrain. We like TheBeat’s Jay Campbell’s take on the news. We’ll share his take with you.

While pilots for United and Continental Airlines keep working on a new contract, all is not apparently warm and fuzzy on the United Airlines pilot side of the house. Reports say that there was a recall vote originally scheduled for Monday’s UAL ALPA MEC meeting. The intended victim? The pilot’s current MEC Chairwoman, Captain Wendy Morse.

Meanwhile the flight attendants at American Airlines offered up a deal for the airline. An immediate 6% raise for its members — and the rest of the contract details would be tabled for 18 months. The airline said no.

Speaking of American — April 20 is just around the corner. That’s the day you can expect to see protests from airline employees over the airline’s latest PUP bonus distributions.

We talk also take a look this week at just how much additional revenue and/or capacity cuts the airlines would need to make — in order to cover the current price of fuel for the remainder of the year. That’s a sobering chart. Thanks to Dahlman Rose analyst Helane Becker for the analysis.

As always, all this, and more in this week’s issue.

Subscribers can access the issue here.

PlaneBusiness Banter Now Posted!

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Okay all you hungry people. This week’s issue of PlaneBusiness Banter is now posted.

Whew.

This is the last earnings issue for the quarter, and that is a good thing.

Next week we can get back to our normal format and usual publishing schedule. Right before we embark on our Turkey day extravaganza.

But — before then — this week we have our hand’s full.

First, we have an update on the Rolls-Royce Trent 900 engine failure involving the Qantas A380. All the Qantas A380s remain grounded. Rolls still isn’t saying a lot. But everyone else sure is. Engines are apparently being taken off the A380 production line, Singapore Airlines has swapped out three engines already, and, well, this is a very serious situation.

It is going to make for a very serious dent in Rolls-Royce’s net profits as well, as you can bet all these airlines are keeping tabs on their expenses incurred and Rolls is going to receive the final bill.

Not to be left out, Boeing had its own problem last week with one of its 787s — as it was forced to land after a fire broke out in an aft electrical panel.

When we’re not talking aircraft and engines, we’re talking TSA.

As someone who is now faced with the prospect of having to go through an “extended pat down” every time I fly as a result of having a big piece of titanium in my hip, I am not happy about the new “group and grab” procedures.

Funny thing though — we received a number of notes this week from airline crew members. It appears that the TSA has pulled back on insisting on either the AIT scanner or the “extended pat down” for crew members. Not in all locations though.

No, the TSA has not issued an official backdown. But I’ve received enough notes to tell me that there has been a relaxation in the previous directives.

We also wrap up third quarter earnings coverage this week with our own “extended” look at Republic and Pinnacle.

If you took a look at the stocks of either airline and how they performed for the last week — you might have some questions.

In the case of Pinnacle, shares soared.

In the case of Republic, they did just the opposite.

We’ll tell you why.

We also go over the September DOT Airline Consumer Travel Report. And the September tarmac and cancellation numbers. Very interesting “rounding” of numbers going on here. We talk about all that as well.

There was a rather bizarre Airbus A380 order announced last week, the DOT and FAA sought to assure air travelers that they are working to make sure older aircraft are safe — only problem is that the efforts won’t take effect for years — and hey, the future King of England’s wife-to-be has two parents who met while working for British Airways.

We only talk about the important things here at PlaneBusiness Banter.

Subscribers can access this week’s issue here.

Vacation Coming To An End….Sigh

Thanks to all of you who have been attempting to get me to comment this week on any number of goings-on in the airline industry.

But, I am happy to say — I resisted.

Until today.

No, I said, I am on vacation, and damn it, I am going to stay offline. Until Tuesday.

Until today.

And what got me to finally break my silence? Something wickedly funny. Of course.

Most of you probably saw the recent YouTube effort in which some enterprising Boeing employee ( I would bet) did a take off on Boeing’s continued delays with the 787. The video used? A now-familiar clip from a recent Hitler made-for-television movie that seems tailor-made for such antics. In fact, there are scores of these parodies now on YouTube, including one dealing with Brett Favre’s sign-up with the Vikings. I know. Just one of those things that seems to be tailor-made for mischief.

This week das Fuhrer has made yet another appearance.

But this time it appears that a Southwest Airlines’ pilot is the one responsible for the sub-titles. And Southwest’s CEO Gary Kelly is the one barking out German invectives to his underlings.

I’ve had more than a handful of you inquire as to whether moi had anything to do with this. I think the reason is because there are some very “inside” management barbs in this new satire. So I guess the assumption is that this was something right up my alley.

But I am here to say — I am completely innocent.

That is not to say that I didn’t chuckle out loud more than once when I watched it, though. (Yeah, you know Business Select takes a hit in here, along with…..”It’s ON!”) But I think I may have laughed the loudest at the “deck party” comment.

Not sure some folks over on Denton Drive are going to be too amused, however. This one hits just a little too close to home. On more than one front.

Serious stuff? Oh of course there has been a lot of serious stuff going on in the industry this past week — including headline-grabbing FAA interventions with both American Airlines and Southwest Airlines. I mean, if this continues, the FAA should just move their headquarters to Dallas, don’t you think?

And yes, Southwest, when not feverishly repairing aircraft this week, also announced a new “fee” for passengers. I’ll be talking about this news this next week, along with a whole lot more. When my vacation finally ends on Tuesday.

Sigh.

Enjoy your Labor Day weekend everyone. Tennis in the greatest city in the world, college football at a stadium near you, and cooler temps almost everywhere.

Life simply doesn’t get any better than this. Get out there and enjoy it.

Slow Monday

Hello all. I’m sitting here twiddling my thumbs, waiting for this week’s issue of PlaneBusiness Banter to be posted. I’m done with my part. Just waiting for the editor person to give me the all clear to hit the “post” button.

Actually it’s a bit more complicated than that, but you get the idea.

Was just nosing around the airline news from this weekend and today. That certainly didn’t take long.

After last week’s news-a-minute pace — today seems slower than a herd of turtles.

For those of you who are PlaneBusiness Banter subscribers, (and if you aren’t you should be), this is our final earnings issue for the quarter as this week I take a long look at the earnings announced by our two Canadian things with wings — WestJet and Air Canada.

One thing I have to say for Sean Durfy, CEO of WestJet. He sure knows how to get your attention. He opened up the airline’s earnings call by saying, “Our focus right now is navigating the short-term environment to achieve our long-term plans of becoming one of the five most successful international airlines in the world.”