Tag Archives: Nasdaq: ALGT

PlaneBusiness Banter Is Now Posted!

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Good afternoon earthlings. How is everyone today?

As of right now, things here at the Worldwide Headquarters are hunky-dory. However, as you can see by this lovely graphic, that is about to change. Sigh. Enough already.

This is how the weather map looks now.

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This is what is forecast for tomorrow morning.

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However, before the ice and snow arrives once again and we have to perhaps endure more rolling blackouts, it’s time to talk about this week’s issue of …PlaneBusiness Banter! Subscribers can access this week’s issue here.

This week we take our usual in-depth look at the recent earnings calls and results from both Hawaiian Airlines and Allegiant Travel Co. Our overall assessment of both carrier’s results? Both airlines are in “transition” modes. Translation? I wouldn’t jump into either stock right now. Too many costs on the horizon.

We also talk about the Raymond James Growth Airline Conference, which was held last week in New York. The conference welcomed two newcomers to the fray — Delta Air Lines and Alaska Air Group.

As most of you know by now, Delta Air Lines took the opportunity to talk about its decision to reduce its capacity — a decision that was universally cheered by the Wall Street community.

However, as of today, we have not heard any news from any other airlines in regard to them doing the same — a situation that one airline analyst finds quite frustrating. So much so that he slashed his estimates on most of the legacy airlines last week as a result.

As Jamie Baker, analyst with JP Morgan wrote, given the rise in the price of fuel and the apparent “push back” that airlines may now be feeling as a result of a fare increase that fell apart last week, reductions in capacity are the answer. Sooner rather than later.

Speaking of those fare increases, while the across the board fare increase attempt sputtered last week, this morning United/Continental decided to stop abusing the leisure class, and instead they announced fare increases for both first class and business class passengers. The increases were matched almost immediately by competitors American and Delta Air Lines.

This fare increase has a much better chance of “sticking” because Southwest does not compete with the first class and business class fare buckets — so unlike last week when Southwest proved to be the spoiler, this increase will probably hold.

In other news, Senator John McCain (R-Ariz) tacked on an amendment to the FAA reauthorization bill last week that would effectively kill the Essential Air Services program. Was this just a political play for headlines? Or is he serious?

On another front, the American Eagle ALPA MEC Chairman, Tony Gutierrez, issued a letter last week outlining where the regional carrier is in terms of its relationship to AMR. We had a number of AE-related emails this week and this is why. We talk about this a bit this week, and oh yes, public kudos to Tony. This letter that he wrote to the AE pilots was one of the most thorough letters of its type I’ve ever read from a union leader to his troops.

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

PlaneBusiness Banter Now Posted!

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Hello to everyone on what is a dark and stormy night here in the DFW Metroplex. This week’s mega-earnings issue of PlaneBusiness Banter is now posted. Be prepared. It’s another long one.

This week we take an in-depth look at the recent third quarter earnings from JetBlue, Hawaiian, Allegiant, and Alaska Air Group.

All in all, a very impressive group of industry representatives.

If you are looking for an airline that is doing its best to run itself like a real honest-to-god profitable investment for its shareholders, look no further than Alaska Air Group, which is now poised to hit its 10% ROIC target for the year.

Not only that but the airline posted an exceptional operating margin for the quarter.

I can’t say enough good things about the management team at Alaska. They have done one heck of a job over the last five years at the airline.

Hawaiian Airlines also had a very good quarter, although the airline continued to see fierce price competition on its trans-Pacific routes. I like the airline’s continued expansion into Asia as a good hedge against the continuing trans-Pacific warfare.

JetBlue posted good numbers as well, and that ROIC metric was thrown around in their call as well. The airline has postponed some aircraft deliveries, it continues to work through its migration to the Sabre reservation system, and overall the numbers for the quarter were good.

Allegiant came in a bit above the analyst consensus numbers that were in place in mid-October, but the air travel company that also happens to run Allegiant Air didn’t quite come in as high as had been previously modeled by most analysts. So — their results were a bit of a good news, “okay” news situation. In terms of the stock — the news was good enough to create a short squeeze on shares of the airline’s stock though. Going into October the airline was the most heavily shorted of all the airline stocks.

This last week yours truly was at Southwest Airlines for their Media Day event. I talk a lot about that in this week’s issue as well. Yes, the rumor is true. The airline had all us media types board an aircraft outside its hangar at the airline’s headquarters — to show us how fast its Row 44 Wi-Fi product is — and it wouldn’t work. We couldn’t connect.

I felt sorry for them. We’ve all been there, right?

Lots more about what we heard and saw over on Denton Drive in this week’s issue.

Also — the hot topic that is filling up our email bag this week are the various heated communications that are coming from almost every pilot union or pilot MEC group that we know of. The subject? The new “enhanced” security measures that the TSA just rolled out this week that includes the “body scanners” in addition to pat downs that we have heard from various people go way beyond what most people are comfortable with.

I fly to Los Angeles on Wednesday. I always get nabbed for secondary screening anyway because of this hunk of titanium that is in my leg. I am not going to be happy if now, I am subjected to a more “enhanced” pat down every time I fly as a result.

Anyway, we talk about all that as well.

We’ve got all kinds of other stuff too in what I figure is easily another 100 plus page issue this week.

Subscribers can access this week’s issue here.