Earnings showtime that is

Today both AMR, parent of American Airlines, and Southwest Airlines, reported fourth quarter and year-ending earnings results.

AMR managed to squeak out a small $17 million, or $0.07 profit for the fourth quarter, the third quarterly profit in the row for the airline. The airline has not been able to string together three profitable quarters in a row since 2000. This result was much better than forecast consensus, which had been for a loss of 7 cents a share.

These results compared favorably to a loss of $600 million, or $3.46 cents per share, posted by the airline a year earlier.

AMR said it earned $231 million, or $0.98 a share, for all of 2006 compared to a loss of $857 million or $5.18 a share in 2005. This yearly profit was also the first since 2000.

Interestingly, as those airlines that did not have sizable fuel surcharges in place over the last few years should see the positive result of a declining oil price kick in this quarter, it’s just the opposite for Southwest Airlines — which for years had a built-in advantage because of its legendary fuel hedges.

But as we all know, those hedges are now beginning to lose their clout — as they continue to rise. For the fourth quarter, Southwest spent 41% more than it did last year on fuel

Consequently, for the fourth quarter of 2006 Southwest saw its fourth quarter profit down 19% year-over-year as a result of higher fuel prices and rising security costs.

Net income in the fourth quarter fell to $57 million, or $0.07 cents a share, from $70 million, or $0.09 cents a share, a year ago.

Excluding special items, the airline posted profit of $96 million, or $0.12 cents a share, up from $81 million, or 10 cents a share, last year. Revenue grew 15% to $2.3 billion. That 12 cent a share figure missed the consensus analysts’ forecast figure of 13 cents per share.

For the full year 2006, net income was $499 million, or $0.61 cents per diluted share, compared with $484 million, or $0.60 cents per diluted share, for 2005.

Excluding special items, 2006 net income was $587 million, or $0.71 cents per diluted share, compared to $425 million, or $0.53 cents per diluted share for 2005. Revenue grew 20% to $9.1 billion.

Speaking of oil prices, the price of a barrel of crude closed Tuesday at $51.21 a barrel, a 19-month low. It was up over a buck today when last we checked.

NYSE: AMR, NYSE:LUV

Funny thing happened this week. Actually it started last week and has only picked up momentum this week.

Former Continental Chairman and CEO Gordon Bethune seems to have taken center stage in the Delta/US Airways saga.

In the last 7 days or so, it seems like Gordon has made himself available to various media outlets left and right, more than happy to bask in the glow of his role of “adviser” to the Delta creditors committee.

I mean, how weird is this?

Does the creditors committee really want him out there saying things like Reuters quoted him today as having said in an interview? (Today he was quoted as saying, “Delta’s creditors’ interests are so diverse that getting enough of them to back any proposal is “like herding cats.”)

Or can Doug Parker and the folks at US Airways feel good when Bethune, who we all know is a proponent of industry consolidation, seems to take a big pass on recommending the deal in the same interview, as he makes the comment, “I can still be a proponent of marriage without agreeing that these two people have to get married.”

Yack, yack, yack. You were hired to do a task Gordo, not become the equivalent of Pat O’Brien offering up the latest “dish” on The Insider.



Just seems to me that now that Bethune is involved in this, he is obviously encouraging more and more media coverage of his involvement in it, i.e., it certainly doesn’t seem like he is telling reporters he won’t talk to them.

Consequently, for some reason I don’t see him simply turning in his time slip to the creditors committee when his job as “adviser” is done and then going back home.

Or I the only one who thinks Gordon might just be getting a little too used to the limelight again — and might now want to stay there as part of any eventual Delta deal that is struck?

Tickers: CAL:NYSE, LCC:NYSE

We got an email last Friday with this lovely image attached.

And what great timing.

Because I have to admit, when I read Delta ALPA MEC Chairman Lee Moak’s comments about the proposed US Airways deal Friday afternoon, this is exactly what I thought of.

For those who missed it, Moak ended his letter to the Delta pilots last week with, “Delta pilots will not change any provision of our contract in order to facilitate the hostile takeover of our company,”

“As such, the MEC remains totally committed and one hundred percent focused on one thing — the death of the US Airways’ merger attempt,” he added.

Okay, time for the truck to back up and unload the political BS. C’mon Lee. The “death” of the deal? A little on the dramatic side if you ask me, but certainly in the realm of heated union rhetoric.

I have nothing against Lee. In fact we’ve exchanged pleasant emails in the past. But I do have a problem when I see a public stance that is taken strictly because of union politics — and not pragmatic reasons.

Oh, I understand perfectly well why Lee has to take this stance, and it hits at just one of the reasons why the labor/management relationship makes this industry much more difficult to manage.

The reason is that the people who are leading unions have one political choice — either they stick up for the option that appears to be less “threatening” to their union base in the short term — or they will be kicked out of office.

Fine — but it offers no chance for either side to look at the longer term, and what is the better option for the company, because the option that may give the company the best chance for survival is rarely the one that will benefit union members the greatest in the short term.

And people wonder why this industry continues to be shackled to its recurring dysfunctionality.

Ticker:DALRQ.PK

Someone just emailed me and wondered,

“How many articles of clothing do you have to remove to sell an A380 these days?

I suspect that dropping trou is only the first step in selling an A380. The next step is bending over… (the next step is left to the imagination of the reader)…”

Yeooow.

Definitely goes to Reuters today for their story entitled, “Airbus CEO Dropped Trousers for Key U.S. Plane Deal.”

“Jean Pierson, the former chief of European plane-maker Airbus, “dropped his trousers to seal a key U.S. plane order in 1997,” Reuters reports. The news agency says the account comes from the book “Boeing versus Airbus,” which is set to be published Tuesday.

As for Pierson’s episode, Reuters writes that Airbus was negotiating with then-US Airways chief Stephen Wolf on a 400-plane deal. “At the last minute, … Wolf started arguing for a 5% discount on the selling price,” Reuters says. And, according to the book, “Pierson began slowly lowering his trousers and saying ‘I have nothing more to give.’ He then allowed the trousers to fall around his ankles.” Wolf is said to have responded by saying: “Pull up your pants. I don’t need any more money.”

Reuters writes that “shortly afterward, US Airways announced the purchase of 124 single-aisle Airbus A320 family jets with options for 276 more, a stab into the heart of Boeing’s competing 737 program. It put the European company on track to overtake Boeing in global orders only two years later.”

Tickers: BA:NYSE, LCC:NYSE

I don’t even know where to start.

A lot of football to talk about before we even get to the things with wings.

As a PBB subscriber reminded me today, I wrote several years ago that the playoff games are usually much more exciting to watch than the Superbowl, and this year has certainly been no exception.

Of course, we have our own dog in this fight this year, and I have to say, I am breathing a bit easier now. Sorry Bears fans, but I think the Philly/New Orleans game Saturday night was between the two best teams in the NFC.

Da Bears? Da Bears? The Seahawks nearly beat da Bears with no secondary whatsoever and a quarterback who, at times, looked like he was on another planet. Or was it just the play calling that was from another planet? (Insert tweaked video of former Coach Jim Mora hysterically exclaiming “Da Bears? Da Bears?” over and over here.)

Of course this has not stopped a couple of PBB Chicago-based subscribers from sending me notes already — wondering if maybe we should engage in a little “friendly wager” of some type. Okay. I’m game. I’m thinking about what it is I want to win.

Speaking of Chicago — if almost 7000 fans could not find time to show up at the stadium Sunday for a playoff game, can someone please explain to me why, when the small number of publicly available tickets to the game Sunday do go on sale Tuesday that only people who have credit cards with zip codes from the Chicago area and Indiana are going to be able to purchase tickets online from Ticketmaster?

I have a problem with this.

Maybe I need to call Ed Stewart up and give him an earful. What do you think? You all remember Ed. He was at Southwest Airlines for years. Finally left for the glitter and glitz of LA and Ticketmaster.

Yep. I think Ed needs an ear-thrashing on this one.

But enough Saints-centric discussion. Alas, my previous dream match-up of the Saints/Chargers is now dead meat. Thank you Tom Brady. I’d say Marty-ball is now dead as well. Bye,bye Marty.

Talk about a game that is going to be fun to watch — the Patriots/Indy game next week is going to be a killer.

Yet again, another Superbowl game before the fact.

Oh, and if you want to know what my mental state was Saturday night, here’s an excerpt from the brilliant Times-Picayune columnist Chris Rose who nailed it in his Sunday column.

This football nonsense is a lot more fun when it doesn’t matter.

I went to the game last night and — don’t get me wrong — it was unbelievable to be there and all that, but I’ve got to level with you: It’s a lot easier in the fall.

In the fall, the weather is turning and the air is fresh and when you talk about the Saints or watch the game with your friends, you think: Wouldn’t it be great if we got into the playoffs?

In the fall, it’s all just speculation and wishing and dreaming and delusional chatter and none of it matters because none of it will amount to anything because it’s the Saints and we all know what happens to the Saints in the winter.

We’ve been at this party for 40 years and our hearts and livers have scar tissue tougher than pigskin and we’ve got a box of broken promises bigger than Hollis Thomas.

So that’s why, in the fall, you can go to a game and if they happen to win, some jughead outside the stadium starts chanting “Super Bowl! Super Bowl!” on the way to the parking lot and you say to the imaginary waitress in your head: I’ll have what he’s smoking.

It’s crazy, talk like that. Crazy is what it is.

In the fall, football is just a game, a pastime, an excuse not to mow the lawn, or an excuse to get out of the house, or to pop an Abita Purple Haze before noon even though it’s not just for breakfast anymore.

But in January, it’s different. In New Orleans, everything is different. Since the flood and all the bad stuff that washed in but not out, everything is different and up is down and cold is hot and brown is the new black and how the hell did we get to the point where it actually mattered if the Saints won or lost a game?

…….Surely it’s a dream. Right? But you don’t feel pain in dreams and, man — this one nearly killed me.

I mean, one minute it’s 3-zip and it feels good and then it’s 6-zip and it feels good and then 7-6 Eagles and this sucks and then 13-6 Saints glory hallelujah and then 14-13 and then 21-13 and then 21-20 and all I can think is: This is a lot more fun when it doesn’t matter.

And then it’s 27-21 and then 27-24 and then all I want are my cyanide capsules, push me in front of the train, just shoot me, would somebody please tackle Westbrook — what the hell’s the matter with you guys and, oh yeah — it’s only a game.”

Yep. I wanted those same cyanide capsules when Reggie Bush mishandled that pitch in the fourth quarter.

Bring on da Bears.

Northwest unexpectedly filed its reorganization plan today with a federal New York bankruptcy court.

It was somewhat unexpected in that the plan was not due until Jan. 16. According to the airline, the plan was filed ahead of the deadline in an effort to avoid “interference” from “outside parties.”

Hmmm. Okay.

Another interesting aspect of this filing was that while the basic plan was filed, the more detailed disclosure statement was not filed.

That is where the nuts and bolts details of the airline’s plan are more clearly spelled out. Especially in reference to how it plans to pay its creditors.

However, because the airline has not yet filed its disclosure statement, a merger or other deal with Northwest is still a possibility.

Northwest’s plan gives it the option to raise money by selling equity in the restructured company and possibly raise capital from private equity firms. The company also plans to convert its existing bankruptcy financing into new forms of debt.

The new debt would include a $175 million revolving credit facility and a $1.05 billion loan, including a $75 million letter of credit, each with a maturity date of August 2013, the airline said.

And, as we all expected, existing shares of the airline will become nothing more than wallpaper.

Guys are here to pick up dead trees that were recently cut down in our yard — an ongoing result of you-know-what. (Begins with a K, ends with an A.)

More airline ruminations a bit later.

In going over the news today, a couple of newsy things of interest involving the things with wings caught my attention.

Probably the most intriguing was the news that American Airlines is going to pull all of its first class and business class fares, and all of its international fares from Expedia. Effective immediately.

Only U.S. domestic coach tickets will now be sold through Expedia.

An American Airlines spokesperson was quoted as saying, “We have to make sure that all of our distribution channels are efficient and cost effective … This is just another step in working toward that goal.”

Somebody is not happy with somebody. Or something.

But what intrigues me about this is, first, what’s the reasoning here, and two, will other airlines follow suit? Or is this a one-shot deal? What about other online distribution sites? Is there some trial run going on here that is going to spread to other sites? Other airlines?

If I were going to make a guess here, I would guess that this means American sells so few of their higher-end tickets on Expedia, that it feels it is not worth it. But international travel? I’d think the airline would sell a fair number of international tickets on Expedia.

I want more information on this one.