Monthly Archives: August 2007

Market Recovers: Airline Stocks Still Slump

Wallstreet-4

What a rock and roll day it was today on Wall Street.

At 1:00 P.M. EDT, the market was down about 343 points. At the close, which just occurred, the DJIA ended the day down  by a few points. (The final numbers are still being calculated.)

As one of the guys on CNBC just said, “As I walked on the trading floor just now, I overheard one trader say, “I need a drink.”

At the close, Continental Airlines had some company in the plus column, an improvement from earlier in the day.

The winners?

Allegiant was up about 1% to 30.18, Alaska was up 3% to 22.24, AMR was up 5% to 22.20, Continental rocked and rolled its way up a nice 9% to 28.82, Delta was up 1% to 15.76, Frontier was up 1.5% to 5.34, JetBlue was up 3% to 9.16, US Airways was up 4% to 26.64, Northwest was up 4% to 15.50, Republic was up 2% to 18.50, SkyWest was up 6% to 24.14, United was up 1% to 38.40, and ExpressJet shares were up a nice 7% to 4.12.

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Airline Stocks Nosedive on Market Drop

As we assumed, after looking at the state of the Asian markets overnight — it’s blood in the water today on Wall Street.

As of this posting, the DJIA is now trading down more than 300 points. The Dow passed the psychologically important “10% correction” level earlier in the morning. And it has continued to drop.

Airline stocks are being hit very hard — with one exception. Shares of Continental Airlines are up 4% as of this posting.

The reason? A positive research note this morning from analyst Jamie Baker with JP Morgan.

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Singapore Sets Date for First A380 Flight

Singapoore

It was reported today that Singapore Airlines is now set to take delivery of its first Airbus A380 on Oct. 15 and has set Oct. 25 as the date for its first commercial flight.

SIA says in a statement that the first A380 will be handed over to it by Airbus on Oct. 15 at a ceremony in Toulouse.

It says the first commercial flight, flight SQ380, will depart Singapore on Oct. 25 for Sydney in Australia. It will return to Singapore the following day.

Meanwhile, as had been earlier reported, tickets for that first flight will be sold on eBay. Those auctions, which will include seats in all three classes, are now set to begin on Aug. 27.

Thom McDaniel is Back in the House

Southwest Airlines Logo

It looks like Thom McDaniel and the TWU are not happy again.

As you may remember, Thom was the head of the flight attendant union at Southwest Airlines three years ago during what were clearly the most acrimonious union/management negotiations that airline has ever experienced.

Well, he’s  baaaacccck.

Trebor Banstetter in today’s Ft. Worth Star-Telegram reports:

Southwest Airlines flight attendants are blasting an airline practice that they say results in a “fake flight attendant” on many flights.

In typical Southwest fashion, attendants have harnessed their sense of humor to criticize the new policy, filming a music video with a jazz singer crooning the Cole Porter song It’s De Lovely, but with new lyrics that complain “this is not our company at its best, this is not the culture of Herb’s Southwest.”

Southwest typically assigns three attendants to each flight, each assigned to “A” “B” or “C” positions depending on their responsibilities. A fourth position, dubbed the “D” attendant, has traditionally been assigned to trainees to gain in-flight experience, according to officials with the Transport Workers Union, which represents Southwest attendants.

But in recent months, the airline has begun assigning supervisors and managers to the “D” position — a move that union officials say violates their contract, creates safety problems and confuses customers.

“A supervisor is not a flight attendant,” said Thom McDaniel, president of TWU Local 556, in a recent interview. “Our members are very upset about this, it feels like fake flight attendants are being put in there to spy on them.”

The union has filed a grievance over the issue, McDaniel said, and debuted the music video, titled Not D-LUVly, Wednesday on its Internet site.

Here are the lyrics, you can access the video here.

The flight is on, the skies are clear

The Southwest “D” Flight Attendants are near,

It’s demeaning, it’s deceptive, it’s despicable.

I understand the reason why.

The D Flight Attendants are only here to spy.

It’s demeaning, it’s deceptive, it’s despicable.

At first glance you would think you were on

Northwest, the old Eastern, Air France.

This is not our company at its best.

NOT THE CULTURE OF HERB’S SOUTHWEST.

Please be sweet and please take care and in a whisper please repeat:

It’s demeaning, it’s deceptive, it’s despicable,

it’s deplorable, it’s dilemma, it’s demented, it’s not Not D-LUVly.

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Asian Financial Markets Hammered; Hold On To Your Hats

Before we sign off for this evening — just a word of caution concerning tomorrow’s market activity. According to CNBC, the Asian markets are getting “hammered” in trading that is still ongoing. Japan’s Nikkei Average is down 3.5%, and the South Korean KOSPI is now down about 7% as of this posting.

The yen has also hit a five-month high against the U.S. dollar.

Methinks it’s going to be a rough one on Wall Street Thursday.

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All Hail the King

Before we let this day fade away, a moment of silence please.

Thank you.

Hard to believe that had Elvis lived, he would have been 72 this year. Alas, he died 30 years ago on Aug. 16.

Even harder to believe that Elvis once approached President Nixon, asking the President to be make him a “Federal Agent At Large.”

Here’s the letter:

Dear Mr. President.

First, I would like to introduce myself. I am Elvis Presley and admire you and have great respect for your office. I talked to Vice President Agnew in Palm Springs three weeks ago and expressed my concern for our country. The drug culture, the hippie elements, the SDS, Black Panthers, etc. do NOT consider me as their enemy or as they call it The Establishment. I call it America and I love it. Sir, I can and will be of any service that I can to help The Country out. I have no concern or Motives other than helping the country out.

So I wish not to be given a title or an appointed position. I can and will do more good if I were made a Federal Agent at Large and I will help out by doing it my way through my communications with people of all ages. First and foremost, I am an entertainer, but all I need is the Federal credentials. I am on this plane with Senator George Murphy and we have been discussing the problems that our country is faced with.

Sir, I am staying at the Washington Hotel, Room 505-506-507. I have two men who work with me by the name of Jerry Schilling and Sonny West. I am registered under the name of Jon Burrows. I will be here for as long as long as it takes to get the credentials of a Federal Agent. I have done an in-depth study of drug abuse and Communist brainwashing techniques and I am right in the middle of the whole thing where I can and will do the most good.

I am Glad to help just so long as it is kept very Private. You can have your staff or whomever call me anytime today, tonight, or tomorrow. I was nominated this coming year one of America’s Ten Most Outstanding Young Men. That will be in January 18 in my home town of Memphis, Tennessee. I am sending you the short autobiography about myself so you can better understand this approach. I would love to meet you just to say hello if you’re not too busy.

Respectfully,

Elvis Presley

P. S. I believe that you, Sir, were one of the Top Ten Outstanding Men of America also. I have a personal gift for you which I would like to present to you and you can accept it or I will keep it for you until you can take it.

I guess Elvis didn’t consider prescription drugs “drugs” so to speak. I wonder what that “in-depth” study of drug abuse consisted of anyway? And yes, I certainly would have liked to have heard Elvis’ comments on the finer points of Communist brainwashing.

Here’s the infamous photograph from their meeting.

5364-18

Oh, and what did Elvis give the President?

Wwii Handgun - Gift To Nixon

Just a little something to use at target practice. Did Woodward and Bernstein know he had this thing?

Midwest Board Sets Thursday Meeting to Discuss Dueling Offers

Duel

Thursday afternoon the board of directors of Midwest Airlines will meet to discuss the dueling offers it now finds on its table. Will it be TPG and Northwest, or will it be AirTran?

According to a release from the airline today, “There can be no assurance that the board will reach a final decision at that meeting or that any definitive merger agreement will be entered into.”

Wouldn’t you love to be a fly on one of those walls?

I know I would.

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Panting Cat Day

I’m getting tired of this relentless heat.

Aren’t you?

Don’t know where you are located, but things here at the Worldwide Headquarters continue to be, well, damn dangerous if one has to be outside for any period of time. As long as I have lived in this part of the world, I can’t remember a time when we’ve had a longer string of days — all over 100 degrees — with heat indexes in the 110s and 120s. And the 130s this last weekend.

No, this isn’t like 115 degrees in Phoenix. I’ve been in that heat. This is like suffocating humid heavy air that makes it hard to breathe.

Wilson-Pant

So I decided to come up with a new name for days like this.

It’s so hot, it’s a “Panting Cat Day.”

We all know about the “dog days” of summer.

Well, this is for those days that go above and beyond.

Think about it. Cats have an image to protect. They aren’t like goofy dogs. Dogs pant all the time. And slobber. And pant some more.

Cats are too sophisticated for all that nonsense.

Bottomline — when you see a cat that succumbs to panting — it’s hot.

Well, I’ve got four of them, and I can tell you — it’s a “Panting Cat” kind of day. Again.

Then, of course,  they come inside and it’s a “lounge on the cool slate floor” kind of day.

Can’t wait to see my electric bill this month. I paid enough last month to pay the monthly payment on a new BMW. Unfortunately it wasn’t a payment on a new BMW.

Aside from all this, what’s going on up on Wall Street today? Is it a “Panting Trader” kind of day?

Well, as far as airline stocks go, it’s a “Sagging Fortunes” kind of day.

I won’t go into the economic news of the day. Suffice it to say — inflation is still creeping around, the DJIA is now down more than 100 points for the day, and the mortgage-induced mess is still with us. Trust me, that mess ain’t going away anytime soon.

But the news that is of import to the things with wings today is oil.

The government releases its energy inventory numbers every Wednesday. Today, the numbers were not positive. As a result, the majority of airline stocks are wallowing in red.

The government reported this morning that crude oil inventories fell 5.2 million barrels to 335.2 million barrels in the latest week. This was about double the drop that had been expected. Gasoline inventories declined 1.1 million barrels to 201.9 million barrels, while distillate stocks, which include jet fuel, rose by 200,000 barrels to 127.7 million barrels.

As of this posting, oil is trading at 73.20/barrel, up almost a buck on the day.

Also — just a reminder. It is hurricane season and we now have a tropical storm in the Gulf of Mexico headed towards Texas, but more importantly we’ve got a tropical storm named Dean that has formed in what we lovingly call “hurricane alley.” I have no doubt that Dean will be a full-fledged hurricane by Friday.

So if you want to see oil prices go even higher — be on the lookout for a forecast that sends Dean more towards the Gulf of Mexico than towards the Atlantic Coast. (Remember, all those oil rigs are out there in the Gulf — some of which never came back in service after the one-two punch of Katrina and Rita.)

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It Ain’t Over Yet; Joe and Company Refuse to Go Down Gently

Airtran Airways Logo

And we only thought AirTran was out of the competition. (No, actually we didn’t.)

This afternoon AirTran issued a press release in which it announced a new offer for Midwest Air Group.

“AirTran Holdings, Inc.,  the parent of AirTran Airways, today announced that, at the request of Midwest shareholders, AirTran has increased its offer for Midwest Air Group, to $16.25 per share in a negotiated merger transaction.

The offer includes $10.00 per share in cash and 0.6056 of a share of AirTran common stock. Based on the closing price of AAI on August 13, 2007, the total value of AirTran’s increased offer represents approximately $445 million.”

This news comes after the largest Midwest shareholder issued a statement today saying that said it was not convinced a sale to a private equity firm is a better deal than the one offered by AirTran.

Pequot Capital Management apparently told Midwest’s board that it’s not convinced the $16 cash offer per share from TPG Capital is a better deal than AirTran’s when other factors are considered.  AirTran had previously offered $15.75 per share.

The Pequot letter filed with the Securities and Exchange Commission claimed that there are a large number of synergies available in a Midwest–AirTran deal which might not be available with TPG.

Pequot managing director Steve Pigott said in the filing that TPG and Northwest may not be able to match the growth opportunities and job creation promised by AirTran.

Not surprisingly, these were basically the same arguments given by AirTran CEO Joe Leonard in this afternoon’s announcement from AirTran — as to why their offer is a better one for Midwest.

Tickers: (NYSE:AAI); (AMEX:MEH)

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Psychology of the Battered Airline Employee Syndrome

From one of our readers:



Psychology of the Battered Woman  Syndrome

   

FOUR PSYCHOLOGICAL STAGES OF

THE BATTERED WOMAN  SYNDROME



  DENIAL

The woman refuses to admit–even to  herself–that she has been beaten or that there is a “problem” in  her marriage. She may call each incident an “accident”. She offers  excuses for her husband’s violence and each time firmly believes it  will never happen again.

  GUILT

She now acknowledges there is a problem, but  considers herself responsible for it. She “deserves” to be beaten,  she feels, because she has defects in her character and is not  living up to her husband’s expectations.

  ENLIGHTENMENT

The woman no longer assumes responsibility for  her husband’s abusive treatment, recognizing that no one “deserves”  to be beaten. She is still committed to her marriage, though, and  stays with her husband, hoping they can work things  out.

  RESPONSIBILITY

Accepting the fact that her husband will not,  or can not, stop his violent behavior, the battered woman decides  she will no longer submit to it and starts a new  life.

Psychology of the Battered Airline  Employee Syndrome

 

FOUR PSYCHOLOGICAL STAGES OF

THE BATTERED AIRLINE  EMPLOYEE SYNDROME



  DENIAL

The employee refuses to admit–even to  him/herself–that he/she has been hosed or that there is a “problem”  in his/her employment. He/she may call each pay cut an “accident”.  He /she offers excuses for management’s greed and each  time firmly believes it will never happen again.

  GUILT

He/she now acknowledges there is a problem, but  considers him/herself responsible for it. He/she “deserves” it  according to various forms of company propaganda, because  he/she has defects in his/her job performance and is not  living up to his/her employer’s expectations.

  ENLIGHTENMENT

The airline employee no longer assumes  responsibility for his/her employer’s greedy, abusive treatment,  recognizing that no one “deserves” to be hosed. He/she is still  committed to the job, though, and stays with his/her employer,  hoping they can work things out.

  RESPONSIBILITY

Accepting the fact that his/her employer will  not, or can not, stop its greedy behavior, the battered  airline employee decides he/she will no longer submit to it and  looks for a new life (Emirates, Virgin, ANA, Asiana, Jet Airways —  or maybe early  retirement).