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PlaneBusiness Banter Now Posted!

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Good evening everyone.

This week’s issue of PlaneBusiness Banter is now posted. This week we’re talking a lot about the two airlines that call Dallas-Ft.Worth home — American Airlines and Southwest Airlines.

Last week Southwest Airlines rolled out its fourth quarter earnings results — making the airline the first to report for the quarter. Overall the airline posted numbers that were just a bit better than expected, although the “noise” from the airline’s merger with AirTran will continue into 2012. The airline also updated its list of AirTran cities it is keeping and those it is putting on the “Don’t fly there no mo” list.

Were there any surprises here? Yep. On both sides.

Meanwhile, the bankruptcy continues at American Airlines. Monday Human Resources SVP Jeff Brundage sent out a letter to employees trying to reassure them that even if their pensions were terminated or frozen, they would still get almost the same payment from the PGBC. Only problem — that is not true if you are a pilot. Or a member of upper management. Why? The pension payouts for those two groups are higher — and the payouts would exceed the maximum levels allowed by the PBGC.

Brundage’s letter was issued, I believe, as a result of the airline’s failure to pay the roughly $100 million it was scheduled to pay into its pension plans last week. News of the airline’s minimal payment it did make was not received well with labor leaders of the airline’s employee groups. The move, coupled with the publicly vocal sparring between the airline and PBGC over the last several weeks succeeded in raising the angst level of employees considerably.

Brundage’s letter was followed by a missive to the troops from CEO Tom Horton. But all Horton’s note said was that the airline was going to make changes in its executive ranks, its management “layers” and that it was going to be the airline it used to be — again.

Again — no details.

Meanwhile, out in Phoenix, US Airways’ President Scott Kirby and his revenue management team are hard at work putting together a network restructuring plan for American Airlines. Or so said a report in Bloomberg last week.

Say what?

Let’s just say the obvious!

Of course US Airways’ President Scott Kirby has his minions working on a plan that will increase American’s revenue performance.

We may not get to hear the details until much later in the year — after American has had its chance to impress the bankruptcy court and the unsecured creditor’s committee with its restructuring plan. But I assure you — yes, US Airways is working on a proposal.

Oh my gosh. And this is just the start of this week’s issue.

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



PlaneBusiness Banter Now Posted!

home-typewriter copy 1.jpg Hello everyone! I hope all of you are not crazed today. It’s that time of year. It’s a good time. But it can also be very stressful. So try to concentrate, leave those cookies alone and get your work done so you can push all the papers aside later in the week and just breathe. And enjoy.

And eat chocolate.

This week’s two-for-one issue of PlaneBusiness Banter is now posted. I told subscribers last week that I was going to delay the publishing of our last issue for the year by a week — so that I could talk about my trip to New York last week.

But that was not the only reason to wait until this week to write.

Delta Air Lines took Manhattan last week. And Brooklyn. And Queens. And the Bronx. And Staten Island.

In addition to the airline’s new route announcements out of LaGuardia, the airline also held its investor conference in New York last week.

We let you know what the airline had to say.

Meanwhile, yours truly presented at the Business Travel News Group’s Corporate Travel Management 2012 Conference in New York last week along with Kevin Crissey, airline analyst for UBS.

It was a packed house and I’ll give you one piece of intel from our session. When surveyed, the group of top corporate buyers overwhelmingly said they see increased spending on air travel in 2012.

I also attended the BTN Travel Hall of Fame dinner later that evening. What a rollicking event that turned out to be, as some of the other inductees decided to turn it into a roast of former AMR Chairman and CEO Robert Crandall.

Meanwhile, while all of this was going on, airline stocks enjoyed a second week of strong gains. Big winners included JetBlue and US Airways.

But Pinnacle Airlines was not as lucky. The airline warned the week before last that it was attempting to restructure contracts with vendors, customers, and employee contracts.

The stock is now trading at about a buck.

It’s a jam-packed issue this week including our yearly column in which we divulge what airline CEOs are asking for from Santa, we look at the October DOT operational numbers, and much, much more.

Subscribers can access this week’s issue — the last issue for 2011– here!

PlaneBusiness Banter Now Posted!

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Hello everyone. This week we feel like we’ve been trapped on a tarmac for 7 hours. Or maybe 36 hours. Or maybe longer.

Yes, it’s the biggest earnings issue of the quarter, as we take the microscope to the third quarter earnings calls this week from Delta Air Lines, US Airways, United Continental, Spirit Airlines, and JetBlue.

How long is this week’s issue. Oh, I don’t know. 150 pages more or less.

Needless to say, there is certainly not a lack of things to talk about in this week’s issue, and some of the topics are not even earnings related.

Take for instance, last weekend’s freak snowstorm in the Northeast. I’m sure the folks at JetBlue would love to give it to you.

Once again, the airline found itself the brunt of headlines far and wide after passengers on a number of the airline’s aircraft were forced to sit on said aircraft for hours, and hours, and hours after landing in Hartford.  American Airlines also saw one of its international flights diverted there, and all in all, a horrible time was had by all.

Although the governor of Connecticut seemed to think passengers weren’t looking at the situation in the right light. He reminded those who finally did make it inside Bradley International that hey, they landed safely, didn’t they?

We also talk a lot this week about the subject of fuel hedging.

I am convinced that airlines need to stop doing it.

Why?

Because it’s not necessary.

Airlines now have the resources and the planning tools they need to weather the ups and downs of fuel prices. Hedging has become a complicated unnecessary expense.

At least that’s how I see it.

And hey, how ’bout the management team at Qantas? CEO Alan Joyce finally had it last week with the ongoing “mini strikes” and other various efforts by three different employee groups to disrupt the airline’s operations. Saturday, the airline simply shut down.

Brilliant move on the part of Joyce in my opinion.

He knew if he did it, the Australian government would be forced to step in, which it did, and the arbitration court in Australia on Sunday ordered the employees at Qantas back to work — but only after it was made clear that employees were forbidden to participate in any more “mini-strike” job actions.

I can’t recall any airline ever doing anything like this. Ever.

As usual, this is just the tip of the iceberg. This week’s issue is huge, and we’re talking about a lotta stuff.

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


PlaneBusiness Banter Now Posted!

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Hello everyone. This week in PlaneBusiness Banter we are talking earnings. And more earnings. And more earnings.

This week’s 150-plus page issue contains our earnings call reviews for American Airlines, Hawaiian Airlines, Alaska Air Group and Southwest Airlines.

To sum up? We now know American has no more unencumbered aircraft (all the furniture has now, officially, been burned), one analyst believes the company is pushing pilots to agree to an expanded domestic codesharing agreement so that American can enter into such an agreement with US Airways, and yet another analyst thinks the airline’s liquidity situation is inevitably going to lead to a bankruptcy filing — probably in 2012.

Meanwhile, American Eagle and its pilots came to terms on a new eight-year tentative agreement last week.

Southwest Airlines‘ earnings call was …long. The airline’s financial results are…confusing. They are going to be that way for probably another couple of quarters — until the merger with AirTran passes the year-over-year comp mark. Meanwhile the airline’s costs are higher than we’d like to see but revenues were good.

Many of you still appear to be confused as to whether the airline lost money or made money. We explain all of that, and we give you CFO Laura Wright’s dissertation on the airline’s hedge situation. In full.

Laura deserves a medal for that performance.

Alaska Air Group had another strong quarter. The airline now does appear to be that very rare breed. Quarter in, quarter out, the airline continues to produce exceptional margins while running a very well managed operation.

Pinch me. Is this company really operating an airline?

Hawaiian Airlines also had a very good third quarter. The airline has taken a number of risks over the last couple of years, in an attempt to diversify its flying mix. This quarter’s results prove the airline’s strategic plan is working.

A heads up for institutional investors — management members from both Alaska Air Group and Hawaiian Airlines will be in New York in November for investor days. I’d recommend you go and talk to the teams from both airlines.

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

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PlaneBusiness Banter Now Posted!

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Hello earthlings. This week’s issue of PlaneBusiness Banter is now posted. In this week’s issue we take a follow-up look at the problem known as AMR. After our look at the airline’s Monday Meltdown last week, this week we give you more insight from an assortment of Wall Street analysts. The upshot? Bankruptcy is not going to save the airline, but at the same time, the airline does not appear to be anywhere near a filing.

The airline also announced cuts in capacity for the late fall and winter months. This news was probably the best news American Airlines could have uttered. Analysts liked the reductions. The airline says they are not a result of falling demand — but of higher fuel prices. Not certain, but the airline’s continued exodus of top-tier pilots just might have something to do with the airline pulling back on the reins as well.

Other airline stocks suffered as a result of AMR’s drop last week. US airline stocks were clearly the laggards in a week that saw the the rest of the markets do fairly well.

NextGen. FAA. Congress. Department of Transportation Inspector General.

Send chills up your spine yet? It should.

Last week the FAA and its project management of the NextGen project got raked over the coals by the DOT IG. But as we talk about this week in PBB, how can the FAA be expected to manage such a complex project when it can’t even count on having money to pay for paper clips from day to day — a result of how the agency is funded (or is not funded) by Congress?

Meanwhile, the European Court of Justice gave the EU a huge thumbs up last week on its plan to charge airlines around the world for their greenhouse gas emissions. Needless to say the airline industry is not happy about this.

Southwest Airlines’ CEO Gary Kelly talked to Bloomberg last week and he started throwing around some huge revenue numbers that he says the airline can produce — as a result of its AirTran acquisition. Only one problem. I’ve been talking to a number of industry people who don’t think he can.

What do you think?

Which reminds me. This week you, our subscribers, get a chance to tell me what the next airline merger will be. That’s right. Sharpen up those pencils and send me your two cents on just which merger could be next on our radar. And why.

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

PlaneBusiness Banter Now Posted!

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Good evening earthlings! This week’s last mega-earnings issue of PlaneBusiness Banter is now posted. This week we dig our way through the recent earnings results and calls from Pinnacle, SkyWest and Republic Holdings. Let me put it this way. This is not an easy time for regional airline operators. Three different stories, three losses.

In other news, we talk a lot this week about why it is I am concerned about the negotiations between the United Airlines and Continental Airlines pilots. This situation has gone on far too long. These negotiations should have been wrapped up in no more than 60 days.

But now negotiations have become centered around the big “S” word. Union squabbling, turf wars, and intra-union power struggles that all go back to ….seniority.

These two groups had a choice going into these negotiations: follow the blueprint set at Delta/Northwest or the blueprint set with America West/US Airways. Every day that passes — it appears both groups are following the wrong set of plans.

I tell subscribers this week why I believe these negotiations are now at the tipping point.

In other news, we talk this week about two analysts and their respective research reports. First, we talk about Avondale Partners analyst Bob McAdoo’s research note on AMR. It was, without a doubt, the most scathing review of the inability of management at the airline to do what it needs to do that I have read from any Wall Street analyst. As he points out — the airline continues to lose at least $1 billion in revenues as a result of bad decisions.

So — what are they going to do about it?

Gary Chase, analyst with Barclays, issued a nice preliminary review of what he thinks the Southwest/AirTran deal is going to mean to Southwest. Both short-term and longer-term. We’ve admired Chase’s take on Southwest for years — and his piece last week was no exception. Opportunity? Yes. But with risks.

We’ve got the March DOT Air Travel Consumer Report, we’ll go over how the airline sector did last week (I’ll give you a clue — jet fuel rose again) and we talk a bit about the upcoming IPO from Spirit Airlines, as well as the results issued Monday from Steve Hazy’s new Air Lease Corp.

And more!

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

PlaneBusiness Banter Now Posted!

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Hello everyone.

This week’s issue of PlaneBusiness Banter is now posted. Subscribers can access it here.

This week we have a pretty good issue. Always takes us a week to get back in the groove after the holidays, and this week I think we have a little bit of something for everybody.

No question that the thrill of new metal hung over the industry last week as Delta Air Lines told its employees it is looking at new aircraft options. While Continental/United did not tell its employees that it too has been checking its bank balances and kicking some tires, industry sources confirm that yes, this is also the case.

Then there was that obscene order placed by IndiGo Airlines — based in India. It was, according to Airbus, the largest commercial aircraft order ever place. A whole slew of A320s, including a nice stable of the new “neo” flavor A320. You know, the ones with the more efficient engine.

But Airbus didn’t stop there. Oh no, they are clearly in their “Let’s Hammer The Boys at Boeing” mode as they also announced a new A320 order from Virgin America. One that also, conveniently, was signed at the stroke of midnight on Dec. 29. (I’m making up the part about the stroke of midnight, but I’m probably not that far off.)

The result of all this? Airbus looks to now have a nice solid start to its “neo” program, and oh yes, the Virgin order pushed Airbus past Boeing in the all-important testosterone-fueled exercise called, “Who sold more airplanes in “________.” Fill in the year.

For 2010, it looks like Airbus nosed out Boeing, 644 to 625.

Not surprisingly, given all this hoopla about new metal, Steve Hazy’s Air Lease Corp. filed its S-1 with the SEC last week. Translation: They are going to do an IPO.

Of course the American Airlines/GDS cat fight continued last week, with one very interesting new tidbit. In last week’s PlaneBusiness Banter I talked with subscribers about how I wondered if there was not more going on between American and ITA than met the eye.

Well, looks like I was right, as American announced a new deal with ITA (American is already a client) for a nice chunk of work with American’s new IT overhaul — which is being spearheaded by HP.

We update subscribers on all the latest GDS related news, and we also share a guest column this week from Montie Brewer, ex-Air Canada CEO. He gives us his take on the GDS/airline situation. (Yeah, I know. Bet you can’t guess which side of the fence he’s on.)

We also have a longish Market Review this week. We bring subscribers up to speed with the latest research reports from three analysts — Jamie Baker and Mark Streeter with JP Morgan; Glenn Engel with Bank of America and Dan McKenzie with Hudson Securities.

All three have different takes — and different things to say — and in the case of Glenn, he gives us part three of his ongoing research series in which he compares airlines on the basis of revenue and cost per plane. None of the usual RASM, CASM stuff. His first two reports last year covered revenues of the major and regional carriers. This latest report covers the costs of the major carriers.

Interesting way to look at the same numbers.

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

PlaneBusiness Banter Now Posted!

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Greetings to all you turkey lovers out there.

It’s Monday. It’s time for this week’s issue of PlaneBusiness Banter.

Speaking of turkeys, yes, we’re talking about the TSA this week. Isn’t everyone?

But we’re also talking about Deutsche Bank analyst Mike Linenberg’s rather gushing research note on Republic Holdings. Also — where does Mike think the industry now has too many competitors?

We’re talking union stuff too. Two more thumbs down employee votes at Delta Air Lines, a thumbs up from the Southwest Airlines’ flight attendants on their contract ratification and a thumbs up ratification from the AirTran pilots on their new contract.

However — there is one part of the new AirTran pilot contract that we are curious about. Can you guess what part that is?

Then there is the picketing this week by the Continental and United pilots. Pahleez. Is this really necessary?

Not sure if you have been keeping up with the fight north of the border, but Canada and the UAE are about to go to blows over the issue of giving Emirates more access into Canada. I mean, this is getting serious.

We have a lot more information this week regarding exactly what happened when that Qantas A380 had an engine suffer an uncontained failure. The laundry list of items that were affected on the aircraft is not pretty.

Meanwhile, as has been the case since the beginning, most of the information coming out concerning the problems with the Rolls-Royce Trent 900 engine is not coming from Rolls-Royce.

Then we had Boeing running around, telling websites they had to remove photos of the damage to its 787 test aircraft. Lovely. I do so love it when a company thinks they can make a problem go away by removing the evidence in a rather heavy-handed manner.

On the GDS front, American Airlines seems more determined than ever to cause mayhem and madness in the travel agency business. More on their latest moves in this week’s issue as well.

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

Subscribers can access this week’s issue here.

PlaneBusiness Banter Now Posted!

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Hello all. It’s that time again. This week’s issue of PlaneBusiness Banter is now posted. Yes, this is the pre-earnings issue. Before the madness begins later today as Hawaiian Airlines starts off the third quarter earnings parade with its earnings release. By the time the week is over, we will have heard from all the major U.S. domestic players.

It’s going to be a strong quarter for the industry. We could even see some record profits posted by a number of denizens. And, yes, for the first time in two years, American Airlines will, finally, post a quarterly profit, although most analysts don’t expect the profit to be much more than $110 million.

On the other side of the cha-ching-o-meter Delta Air Lines is forecast to post the largest profit for the major airline group, as it should post a profit in excess of $730 million dollars for the quarter. Not bad. Not bad at all.

But before all those big numbers start to roll in later this week, we are talking this week about the recent ALPA national election of officers. To say that the largest pilot union in the U.S. just made a rather notable change in its leadership would be an understatement. We talk this week about why I like the fact that Lee Moak is the organization’s new President and why his outlook and approach to labor/management negotiations is so different from what we have seen historically from other labor leaders, not just at ALPA.

And yes, we think this is a good thing.

For those of you who are not familiar with Lee, you can catch a public posting of a PBB Lounge Lizard interview we did with him last January over on our Planebusiness.com site.

The DOT issued its latest Airline Consumer Travel Report numbers last week. Which airlines performed well and which ones didn’t? We talk about all that, and we take another look at the number of reported tarmac delays and cancellations. Is there a discernible trend here or not? It depends on how you interpret the numbers.

We also talk about the situation in France this week. To put it simply, if you don’t have to fly there, don’t. Why? Unhappy French workers. Everywhere. Including airports and air traffic control towers.

We had two new airline marketing campaigns hit the airwaves last week. What do we think of those? We’ll let you know.

Lots of mail in this week’s email bag too.

All this and more in this week’s edition of PlaneBusiness Banter. Subscribers can access the issue here.

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.