PlaneBuzz

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.

Posted by Holly at 5:53 PM | Permalink | Comments (0)

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.

Posted by Holly at 12:58 AM | Permalink | Comments (0)

Hello everyone.

For those of you who are subscribers and print out PBB, I warn you -- this one is probably going to be more than 150 pages. Yes, it is a return of the "Killer Earnings Issue." (Insert screams here.)

This week we're looking at the recent earnings calls of Delta Air Lines, United Airlines, US Airways, and JetBlue Airways. Only one of the four made a profit. Do you know which one?

The laggard in the bunch was definitely United Airlines. The airline's 1Q revenues clearly showed the effect of the airline's SHARES cutover. The problem? The airline still has a number of cutover issues that have yet to be resolved -- and these issues directly affect the ability of the airline to capture additional revenue and/or they concern upgrades.

Between all this and the usual problems that any merger comes with -- this year is looking more and more like a transitional year for United.

Delta AIr Lines, on the other hand, produced excellent revenue during the quarter, as did US Airways and JetBlue.

As we also note in our comments about US Airways' results, the airline continues to be a great poster child for our "Just Say No to Fuel Hedging" campaign.

The airline posted a relatively small loss for the quarter -- with no fuel hedges in place.

This week, Delta Air Lines announced that yes, it is going to purchase an oil refinery. When you stop snickering, I'll tell you why I like the move.

Hawaiian Airlines' shares had a nice gain last week -- the result of better than expected earnings results and strong guidance. Meanwhile. shares of US Airways picked up even more ground last week. For the year, our favorite trading stock (per our comments in January) has picked up more than 103%.

Of course no issue of PBB would be complete now without the latest addition of the AMR Bankruptcy Follies. This week we talk a little about Harvey Miller -- the ex-Lorenzo attorney who is AMR's lead restructuring counsel. We also tell you how much he is charging AMR by the hour. After you recover from that nugget, you can read our take on the airline's attempt to negate the significance of the airline's three unions and their signed term sheets with US Airways, and we talk about some of the comments that came out of last week's court testimony.

Yes, apparently AMR did have another strategy besides the 'Cornerstone Strategy." It was the "Limp-Along" or "Kick the Can" strategy.

All of this and more all all of this in this week's huge issue of PlaneBusiness Banter .

Posted by Holly at 7:54 PM | Permalink | Comments (0)

Good evening Earthlings.

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

The last week has been brutal. I'm not kidding. First, we had two airlines report earnings last week, and we have the full review of the earnings call this week from Southwest Airlines and Alaska Air Group.

Our short take? Alaska turned in a respectable quarter -- especially considering the airline used to simply assume it would post a loss in the first quarter. Not anymore.

This was also Alaska CEO Bill Ayer's last earnings call. Ayer, one of the best CEOs in the business -- will remain as Chairman. Should investors be worried about this change at the top of one of the most well-run (and profitable) U.S. airlines? No. I'll tell you why.

As for Southwest, the airline has us totally confused.

It keeps pushing back dates for various merger-related integrations with AirTran. That we get. The airline clearly, as many of us said at the time the deal was announced, did not and still does not have the technology underfoot to make this deal work.

That includes the technology necessary to enable Southwest to fly internationally. Or to merge fully with AirTran. And then there are the fees that AirTran charges as part of their operation. An operation that, in a number of ways, performed better than Southwest in the first quarter.

Now they say they are going to keep all fees that are currently a part of the AirTran model in place. For at least 2-3 years.

Say what?

So now the "we're going to migrate the AirTran operation into that of Southwest as quickly as possible" mantra has changed.

But why? The airline could switch off the fees at AirTran overnight.

Could it be Southwest is finally beginning to understand the value of "the upsell?"

No. Otherwise they wouldn't be putting more seats in its 737-700s.

See what I mean about confusing?

About the best news out of Denton Drive last week was the news that the airline has finally made a decision about upgrading at least some of its IT incapability.

The airline announced it was going with Amadeus -- and will use that company's res product to enable it to start international operations. But not until 2014.

(Actually I think we'll see Amadeus take both the international and the domestic PSS projects on at Southwest before this is all over.)

But clearly the major news last week was the announcement Friday that the three major unions at American Airlines had signed term sheets with US Airways -- in effect telling management at AMR they want no part of a standalone airline -- and pretty much throwing out a vote of "No Confidence" towards the current AMR management.

Needless to say, the fact the pilots did this pretty much confirms what we had said here last week -- that the "Hale Memo" was a farce. Clearly Mr. Hale just signed his name to something that had no truth attached to it whatsoever.

And then the powers that be at AMR wonder why it is that their employees don't trust them. Funny how that works.

We talk a lot about what happened last week, tell you what you can expect to see happen in the next weeks and months, and why you shouldn't think that things have stopped happening just because they aren't happening in public.

No question about it -- the actions of the three union leaders and their boards last week was amazing. Something we've certainly never seen in this industry before.

No surprise -- shares of US Airways climbed sharply last week on the news of the union agreements.

In addition, did you hear about the lawsuit that AIG, parent of ILFC has filed against Steve Hazy, the founder of ILFC, and currently the CEO of Air Lease Corp.?

The really bizarre part of the story -- all the major players were in New York at the Plaza Hotel for the Air Finance Conference this week when the news hit.

I would think that might have made things just a tad uncomfortable.

As always, we have all of this and more -- in this week's issue of PlaneBusiness Banter.

Posted by Holly at 3:00 AM | Permalink | Comments (0)

Hello everyone. Just wanted to post a note to let you know that yes, there will be an issue of PlaneBusiness Banter posted this week. We will publish later today. (Wednesday)

My excuse for our tardiness is the same as it was last week -- 92-year old PlaneDad. (He's not here, so he's an easy mark.)

Thank you to all of you who have sent me emails and tweets. PlaneDad is doing just fine -- as long as he does not try and walk on his own. He leaves the hospital today, after which he will be admitted to a skilled rehab facility.

Our PBB publishing schedule will be back to normal with next week's issue.

Talk to you later!

Posted by Holly at 11:22 AM | Permalink | Comments (0)