Hello everyone. Hope you all had a good weekend. Not a lot to report here from the Worldwide Headquarters except that we were wrestling with a warped fan housing for the air conditioning here at the Worldwide Headquarters yesterday. Actually this started last week when suddenly whenever the AC went on — this loud vibrating noise would shake the ceiling in my office, in addition to the walls on the other side. After a while it was enough to drive one batty. Nothing like cyclical vibration to make you nuts.
Yes, well the friendly AC man was here today. So we’ll find out tomorrow if they still make parts for the beast in the attic or if a new blower housing has to be fabricated.
Always something, isn’t it?
Speaking of always something — what have the things with wings been up to this first week of June?
Well, the week did not get off to a good start after Continental reported less than convincing, and much less than expected, RASM estimates in the airline’s May traffic release. The release was issued after the close of the market on Friday.
Yes, this is why airline stocks had a horrible day for the most part Monday.
Actually today isn’t looking much better.
Yesterday Southwest Airlines posted their May traffic numbers — the airline saw RPMs up 5.2%, while ASMs were up 9.2%. This resulted in a load factor decline of 2.8 points, down to 74%.
I mention this because Kevin Crissey, analyst with UBS, did something new and different. He sent out a note today with a link to a video interview with Southwest CEO Gary Kelly.
And what do you think Gary said in the interview?
Well, he said a number of things. But the most notable was the fact that Gary said the airline would consider slowing its growth — “If slower growth is what we need to get back on our profitability target, then we’ll certainly do that.” The interview was conducted last week.
Kelly then added that he wanted to see if profit growth continues to lag over “a couple more quarters” before making a decision on slowing the carrier’s expansion.
I’m glad to hear this, but I think it needed to be said earlier. And I’m not sure “a couple more quarters” is necessary.
That sounds like the way the Federal Reserve seems to be moving under Ben Bernanke. “Don’t take action until the obvious is, er, obvious.”
Oh, and why the hot pants photo today? Happy Birthday to the PlaneBrother — a man who still talks longingly about how, as a then late-night mail hauler running out of Love Field, the best part of the job was when the last Southwest flight of the night arrived, and he got to watch the Southwest flight attendants depart. In their hot pants — of course. And no doubt his tongue was on the ground the entire time.
Tickers: (NYSE: LUV, NYSE: CAL)
