Tag Archives: continental airlines

PlaneBusiness Banter Now Posted!

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Hello earthlings. This week in PlaneBusiness Banter we are, of course, talking fuel prices. Jet fuel prices to be exact. New York Harbor Jet closed today at $3.22/gallon. Have you filled up your Boeing 737-800 lately? Yes, well, if you have — you can understand why the airline industry is having its own equivalent of an anxiety attack.

Today American Airlines became the second major US carrier to announce a reduction in its capacity forecast for the year. (JP Morgan analyst Jamie Baker has to be sooo happy with this news — after the hard time he gave the airline about their capacity plans in the airline’s fourth quarter earnings call.) Delta already reduced its numbers in February.

Who will be next?

We also have our in-depth earnings call review this week for both SkyWest and Republic Holdings — our last two US airline industry earnings calls for the fourth quarter.

Calls for both airlines were quite interesting, but I have to say, I did not realize that ….well, I’ll keep what I was surprised about in the SkyWest call a surprise. You’ll just have to read.

We also talk about the fourth quarter numbers that a number of Asian carriers posted last week including Air Asia, Malaysia, and Tiger Airways.

We also take a look at US industry revenues for the fourth quarter this week. If you want a graphical look at how revenues in this industry are consolidating — your search has ended with this week’s issue.

Also — do you know the difference between a “weighted average” and normal average? If you frequently look at summaries about various industry metrics, it might be a good idea if you knew what the difference was. There — that’s our small effort at financial education for the week.

Airline stocks? Can we change the subject please? With crude oil prices up more than 13% on the week and jet fuel up 8% — it was a horrible week for the sector. Shares of Air Canada posted the biggest loss of the double-digit loser group.

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

Subscribers can access this week’s issue here.

It’s Official: United Airlines (Under New Management) Takes to the Skies

How do you know when an airline merger is official?balloons.jpg

When someone you know who works at Continental Airlines sends you an email and his email address has suddenly changed to John Smith@united.com.

Yep. The deal is done. Today United and Continental officially became one entity, the largest airline in the world, with both airlines operating under the umbrella of parent United Continental Holdings, Inc. Shares of the new company also began trading this morning under United’s old ticker on the NYSE, UAL.

(I for one am very glad to see the airline stop trading on the Nasdaq exchange under that annoying UAUA ticker.)

Which reminds me. I need to go in and reconfigure our airline stock ticker widget over there to the right.

Pardon me while I go try to remember how to do this.

Mega Earnings Issue of PlaneBusiness Banter Now Posted! — United Airlines Tague and Mikells To Leave

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Hello everyone.

This week we have a 100-plus page earnings issue of PlaneBusiness Banter for you to peruse at your leisure. And yes, at that length, it should more than take up all of your leisure time for the week. Have no fear. Next week we’ll give you another one!

This week we take in-depth looks at the recent earnings results posted by American Airlines, US Airways, United Airlines, Continental Airlines and Delta Air Lines.

This coming week the PlaneBusiness microscope will be trained on the 2Q results of JetBlue, Alaska, AirTran, Allegiant and Southwest Airlines — which is scheduled to report its second quarter numbers on Thursday.

A couple of quick observations from the group we took a look at this week.

One, even before the formal announcement was issued this morning, it had been clear for some time that United Airlines President John Tague was not a member of the executive transition team that was going to stay with the “new” United. That fact was also crystal clear as you listened to the airline’s earnings call last week.

This morning, the airline formally announced that John, Kathryn Mikells, Graham Atkinson, and Rosemary Moore would not be staying with the “new” United.

Zane Rowe, current CFO at Continental will remain, but Pete McDonald will come over from United as COO. As for the rest of the top tier execs, including those heading up marketing, communications and HR, all will come from Continental. And of course, Jeff Smisek will be CEO.

We told you so. From the beginning.

Back to earnings.

Of this group, there was clearly one airline that posted earnings above and beyond — that airline was US Airways. In fact, while the airline’s numbers were great as they were, the airline would have seen their EPS figure come in 8 cents higher — had the airline chosen to classify a refund from the TSA as regular income — not a special item. (As some airlines chose to do, including United Airlines.)

The airline posted one great quarter. On a number of fronts. It managed to stash a nice chunk of cash as well.

As for United and Continental, it’s really kind of pointless to talk about them as viable standalones at this point because the merger looms in the background. In terms of potential stock investments — I’d say all bets are off here until after the actual merger is much further along.

Delta Air Lines, which was the subject of our last non-PBB post here in PlaneBuzz had a nice quarter, and yes, the comments it made about guidance and its fourth quarter increase in capacity were way overblown.

All of that capacity hysteria was so yesterday.

Good quarter for the folks in Atlanta.

And finally, American Airlines trudged out its loss for the quarter last week as well.

We are once again putting American Airlines on the official PlaneBusiness Titanic Watch this week. The airline announced a number of executive changes this last week — but I’m not sure they are going to be enough to get the airline out of its self-created sinkhole.

More on all that in this week’s issue.

We also wrap up the news from Farnborough, and we talk about the legal move US Airways announced Monday, as they try to attempt to break the seniority fight log jam that exists between its pilots.

And finally — yes, we talk about the ongoing Tarmac Tales. Consulting studies, DOT rants, and all.

All this, and more — including a shot of the new Virgin Atlantic livery. Woo hoo! (We have to do something to celebrate Sir Richard’s 60th birthday.)

Subscribers can access this week’s issue here.

PlaneBusiness Banter Posted!

Greetings to all on what was a very hot Memorial Day here in the Dallas-Ft.Worth Metromess.

I hope all of you had a good Memorial Day holiday and most importantly, I hope all of you took a minute between bites of your grilled hamburgers to thank those who serve this country in our Armed Forces. Or who have served.


The latest issue of PlaneBusiness Banter is now posted. Subscribers can access the newly posted issue here.

This week I talk about the new “ugly girl” in the industry. Yep, I’m talking about American Airlines and that airline’s merger options.

But American is in the news for other things — including yet another TA with a TWU-represented employee group. However, to say the union leadership gave the deal a lukewarm endorsement would be an understatement.

British Airways saw itself in the middle of yet another strike by its cabin crew members today. This one started on Sunday and as today is a Bank Holiday in the U.K, the work slowdown will probably hit the airline a bit more than the last one. Which just ended on Friday of last week.

I know. It’s pure insanity.

This last week airline stocks had a great week with shares of US Airways leading the pack. Handily. The main reason for this sudden burst of vitality? Two bullish analyst notes. JP Morgan analyst Jamie Baker upgraded the entire sector, and had very positive things to say about US Airways in particular. His comments were then followed by a bullish American Airlines/US Airways research note issued by Bob McAdoo with Avondale Partners just a few hours later.

The combined one-two punch was clearly felt across the sector, but especially in shares of US Airways.

Is the Porter Airlines IPO in trouble? First quarter numbers sure didn’t help it much.

Virgin Blue had a surprise for its investors this week, and in our Market Review this week we talk about the resurgence of private equity support for the aircraft leasing sector.

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

United Airlines BOD Approves Deal With Continental Airlines

As expected, news reports this afternoon say that the board of directors of United Airlines has okayed a merger with Continental Airlines. The Continental BOD is expected to meet later today and do the same.

The expected merger is valued at more than $3 billion and the formal announcement is expected Monday.

For now, my lips are sealed. I’m in the middle of writing another 100 page earnings issue of PlaneBusiness Banter. But I will say this — I hope the folks at Continental did their homework.

Goodbye Houston, hello Chicago.

PlaneBusiness Banter Now Posted

home-typewriter copy 1.jpgThis week’s issue of PlaneBusiness Banter is now posted. Subscribers can access the latest issue here.

This week we are talking about ….what else? The latest chapter in the United Airlines/Continental/US Airways mating dance.

Do we think anything has changed? What do we think is going to happen?

We also talk about the press release that Southwest Airlines issued Friday pertaining to its now-dead codeshare agreement with WestJet.

As our PlaneBusiness Brown Bag Analyst told PBB subscribers two weeks ago — this was all about New York. More on all that in this week’s issue.

Then, of course, there is that little problem of all that volcanic ash that is now making its way slowly over the UK and much of Europe. Volcanic ash and jet engines — not a good combination. For much of Europe, and all of the UK, air travel has effectively stopped altogether, although there were a few “test” flights that went up today — in an attempt to “measure” the level of ash in the atmosphere.


Meanwhile today Pratt and Whitney issued the following statement:

“Volcanic ash can damage aircraft and engines in several ways. P&WC encourages operators to refer to their airframe OEMs guidance on a potential volcanic ash encounter for additional information.

While P&WC acknowledges that the Local Regulatory Authority has the final determination of whether flight operation is to be conducted, we want to inform you, our customers, of potential hazards.

P&WC does not recommend operation in conditions where volcanic ash is present. Let us explain why.

Volcanic ash may clog air filters of turbine engines, block cooling air passages, erode the gas path components, and erode the protective paint on casings. Volcanic ash entering the engine can also melt in the combustor and then re-solidify on the static turbine vanes, potentially choking the turbine airflow and leading to surging and an in-flight shut-down. It is also noted that there is a high level of acidity associated with volcanic ash, and this may also lead to deterioration of engine components.”

Airline stocks had a pretty good week this week, but oil was positively volatile. Then there was the news of the SEC fraud case against Goldman Sachs. Oh boy. This is just the small tiny piece of what is going to be a very ugly iceberg. We tell you why.

And finally, in addition to all the other things we talk about this week — there is this major news.

This week we award, for only the second time in 14 years, a PlaneBusiness Wild Turkey Award to an airline CEO who we think has done an outstanding job in leading his employees and managing his airline. No hints. You’ll have to go find out who it is somewhere else.

And yes, the award is named in honor of you know who.

PlaneBusiness Banter Now Posted!

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

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This week we talk about round two of the British Airways strike — and about how we think Unite’s efforts are — or are not having — an effect on the airline’s operations.

Meanwhile, there is a pilot strike now scheduled against Lufthansa in two weeks. Not only are the pilots there picking up verbal support from other pilots groups worldwide, but now another airline employee group may join them on the picket line.

Did we just have an outbreak of Norovirus on an airline flight? Yuck.

WestJet’s new CEO dropped a bomb in an interview Friday with the Financial Post. Looks like WestJet isn’t going to wait on Southwest to get it’s IT act together. It’s apparently considering a codesharing agreement with Delta. Is this a good move for WestJet? We talk about it — as well as one of our subscribers who has been taking a closer look at the airline and its market opportunities.

Then there is the slot swap deal involving US Airways and Delta Air Lines. The two airlines don’t think the FAA should be involved in the deal at all. Or the DOT.

Want to take a guess as to who they think should make the decision on this proposed deal?

We have a guest columnist this week in PBB. I’m not tellin.’

Airline stocks had a great week again this week, we have the latest “Airline Question of the Week” from Morgan Stanley, and we talk about why it is Barclays is bullish on JetBlue in Beantown.

All this and more – as we all eagerly await the arrival of the Easter Bunny here at the PlaneBusiness Worldwide Headquarters later this week.

Subscribers can access this week’s issue here.

This Week in PlaneBusiness Banter

You want to know how much money the airline industry had to shell out in additional GDS fees in 2009 as a result of the OTAs dropping their online booking fees?

We know the answer. At least we know how much Forrester Research estimates the airlines lost.

This week in PlaneBusiness Banter I sit down with Henry Harteveldt, VP and Principal Analyst with Forrester Research. We not only talk about the airlines and their additional GDS costs, we talk about onboard Wi-Fi and why AirCell’s pricing is too expensive, American’s lousy business class seats, Braniff, the shift that Forrester sees happening from legacy carriers to LCCs by corporate travel managers, and, of course, United’s decrepit onboard entertainment systems.

In other news, we look at the surprise Continental Airlines pulled on its pilot group last week. Hey, if the pilot group is going to keep waving the Delta Air Lines‘ pilot contract around — why not just give it to them? With a few minor revisions. That is exactly what the company has offered as a counter-proposal to what the pilots offered up in December.

Is this a good deal for the airline? For the pilots?

Meanwhile, Unite, the union that represents the cabin crew at British Airways made good on their promise to strike the airline this weekend. The airline estimates it has lost £7 million ($10.6 million) for each of the three days. It also says it will take the rest of the week to get itself re-positioned. Then– on Saturday, Unite has scheduled to begin a four-day strike against the airline.

Not to be outdone by the British Airways‘ cabin crew members, pilots at Germanwings and Lufthansa Cargo are now set to join Lufthansa pilots in a strike against that airline in April. After Easter. (That was considerate of them.)

This last week ISTAT held its annual conference in Orlando. We talk about the feedback we received from several subscribers who were in attendance — and yes, ILFC’s Steve Hazy was there talking up his new airline leasing venture.

Meanwhile, lots of regulatory news last week from the FAA, the NTSB, and the Office of the Special Counsel. We talk about all that — and yep, then there was that “Flight from Hell” on Virgin America last week. JetBlue saved the day. Ouch.

On the analyst front — Dan McKenzie with Hudson Securities issued an informative research note last week that looks at the changes in the competitive capacity game. We always like those.

All this — and a lot more. In this week’s issue.

The Earnings Just Keep on Coming…


During weeks like this, I’m not really sure if I should even get out of bed in the morning.

Considering we are enjoying a nice gentle Fall rain here in the DFW Metroplex this morning, that’s even more incentive not to get up.

Alas — duty calls.

Two days, and we have now had six airlines have report earnings so far this week — with more to come. The rundown goes like this: Continental, UAL, parent of United Airlines, AirTran, Allegiant, Hawaiian, and AMR, parent of American Airlines.

Any surprises in the results that have rolled out so far this week?

No real “surprises” but a few things that do warrant some discussion.

One — United Airlines posted pretty good numbers for the quarter. Excluding special items, the airline posted a loss of $0.43 a share. This was much better than the consensus forecast of loss of $0.94. The airline posted better than expected results both on the revenue and the cost side. The airline posted a 2.8% operating margin. Granted, that kind of margin would make people in other industries weep. But in this industry, it might end up being one of the better performances for the quarter — compared to its peers.

AirTran? No real surprises here. The airline posted a good quarter. Forecast was for the airline to post a profit of 8 cents a share. That’s what the airline did. It also posted a very nice 5.1% operating margin — 13.5 points better than third quarter 2008.

Dovetailing with the upgrade note on AirTran issued by JP Morgan analysts Jamie Baker and Mark Streeter late Sunday, the airline did, in fact, post a better operating margin than Southwest this quarter. Southwest posted a 4.8 operating margin (excluding special items.)

Allegiant? Another great quarter by the airline. The airline reported a profit of $0.68, which was better than the Street estimate of $0.63. The best news from the airline’s call to me was the fact that the airline’s new service in Los Angeles seems to be off to a tremendous start. The airline said that July operating margins for the new service, which just started in May, were already pretty much up to the airline’s system average. This compares to other markets, which have usually taken as long as two years to hit the same levels.

Continental reported this morning, as did AMR.

Continental reported a net loss of $18 million or $0.14. Excluding $20 million in special charges, the airline posted a profit of 2 cents a share.

Analysts had expected the airline to post a loss of 6 cents a share.

As for AMR, parent of American Airlines — the news wasn’t nearly as positive. The airline didn’t come anywhere near a profit for the third quarter.

The airline posted a net loss this morning of $359 million or $1.26. Excluding special items, the airline posted a loss of $265 million or $0.93. Consensus had the airline expected to post a loss of $0.95. Operating margin? Excluding special items, a negative 2.5%.

We’re off to listen to the calls from both CAL and AMR. Behave yourself while I’m gone.

And TheBeat Goes On…


Hello earthlings. How is everyone today?

I myself am just peachy. I returned yesterday from a nice two day jaunt to Austin, TX., where I was honored to have been asked to give the luncheon keynote presentation at TheBeat Live Conference.

If you are involved in corporate travel, if you need to interact with a GDS system on a regular basis, if corporate airline contracts make you dizzy with frustration, if the thought of migrating your airline’s computer system to a new version keeps you up at night — or any combination of the above — TheBeat should be required reading for you. (This link takes you to their blog, the publication is subscription only, just like PlaneBusiness Banter.

TheBeat was begun several years ago by Jay Campbell, who was a reporter for years with Business Travel News. Jay and I go way back. Waaaaay back.

The cool thing about Jay and David Jonas and Mary Ann McNulty and the rest of the gang who now work under the Promedia umbrella is that they have the same irreverent attitude towards this lovely and oh-so-entertaining industry as I do.

As a result, a gathering of Beat subscribers is very much like what a gathering of the PlaneBusiness Banter subscriber base would be. Lots of opinions, lots of in-your-face discussions, and a really worthwhile way to spend a couple of days.

So — what was the topic of my presentation this year? “Liquidity, Leverage and Labor.” I think that is pretty much self-explanatory.

What is one thing that I learned from attending this year’s conference? Amadeus is not sparing any expense as they greatly expand their presence in the United States. On a number of different levels.

Needless to say, the question of whether the GDS systems are worth it, are becoming irrelevant, or need to change into something completely different was a major topic both officially and unofficially.

The state of corporate contracts with airlines — a hot topic. The issue of just who is going to pay for the ever-escalating cost of “look to book” ratios in terms of accessing travel information online — a hot topic. The effect of individuals now being able to control their entire travel experience in the palm of their hand, thanks to the iPhone and more than 2000 travel-related applications available for that iPhone?

The general consensus is that we really haven’t even scratched the surface on how this is going to massively change the way travel is both managed and consumed.

Oh yes, which leads to another big area of change — control of travel and its expenses from a corporation perspective. Who has it, who is losing it, and who is taking it.

Oh and the procurement method of purchasing travel? If your company is still doing it — you need a new CFO. And if your CFO is the one in charge of authorizing travel, you need a new CEO.

More in this week’s PlaneBusiness Banter on the conference.