Monthly Archives: November 2010

PlaneBusiness Banter Now Posted!

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Hello all.

Here’s hoping that all of you had a wonderful Turkey Week. I did. Although I didn’t end up with enough left-over turkey. I may have to roast another one here shortly, just so I can have leftovers to make turkey hash with.

This post-Turkey Week issue we talk about a lot of things. First, our column this week looks at Orbitz and how it got to where it is today — and why American Airlines is trying to pull its inventory from its website. I take a look at the history of the company — and how it has evolved from its humble beginnings. Ahem. You all remember those beginnings. The company was set up as the “Travelocity Terminator” — the first attempt to set up a “direct connect” OTA for the airlines that created it.

My how things change.

Of course we talk about the as-yet-to-be-announced delay for the Boeing 787, the update from Qantas on its A380 operations, and yes, we even talk about how Air France is going to once again undertake recovery operations to find the black boxes and anything else it can find from its lost Airbus in the Atlantic Ocean this coming spring.

Union talk? Of course. We follow up our issue last week with a great letter to the editor from one of our subscribers in which he touches on both the Continental/united scope “problem” and the flight attendant situation at American Airlines. In a very astute manner I might add.

Airline stocks? This week we talk about the latest from Morgan Stanley analyst Bill Greene. Mr. Greene happens to believe that there is opportunity in them there shares. Airline shares that is. Right now.

Virgin America lands in Dallas this week. Yee haw! In anticipation of Virgin’s arrival, American is offering their customers the usual heavy dose of frequent flier points on DFW flights to LA and SFO, but as I talk about this week — is this tired and true tactic still relevant?

I’m not sure. At least not in this case. The Virgin product is a nice one. And there are a whole lot of folks for whom accumulating more AAdvantage miles is not nearly as important as a nice comfy seat, cool onboard entertainment and food options, and well….that whole Virgin Vibe thing.

Oh, we talk about a lot more this week — but I need to get this posted.

Subscribers can access this week’s issue here! Now!

PlaneBusiness Banter Now Posted!

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Greetings to all you turkey lovers out there.

It’s Monday. It’s time for this week’s issue of PlaneBusiness Banter.

Speaking of turkeys, yes, we’re talking about the TSA this week. Isn’t everyone?

But we’re also talking about Deutsche Bank analyst Mike Linenberg’s rather gushing research note on Republic Holdings. Also — where does Mike think the industry now has too many competitors?

We’re talking union stuff too. Two more thumbs down employee votes at Delta Air Lines, a thumbs up from the Southwest Airlines’ flight attendants on their contract ratification and a thumbs up ratification from the AirTran pilots on their new contract.

However — there is one part of the new AirTran pilot contract that we are curious about. Can you guess what part that is?

Then there is the picketing this week by the Continental and United pilots. Pahleez. Is this really necessary?

Not sure if you have been keeping up with the fight north of the border, but Canada and the UAE are about to go to blows over the issue of giving Emirates more access into Canada. I mean, this is getting serious.

We have a lot more information this week regarding exactly what happened when that Qantas A380 had an engine suffer an uncontained failure. The laundry list of items that were affected on the aircraft is not pretty.

Meanwhile, as has been the case since the beginning, most of the information coming out concerning the problems with the Rolls-Royce Trent 900 engine is not coming from Rolls-Royce.

Then we had Boeing running around, telling websites they had to remove photos of the damage to its 787 test aircraft. Lovely. I do so love it when a company thinks they can make a problem go away by removing the evidence in a rather heavy-handed manner.

On the GDS front, American Airlines seems more determined than ever to cause mayhem and madness in the travel agency business. More on their latest moves in this week’s issue as well.

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

Subscribers can access this week’s issue here.

PlaneBusiness Banter Now Posted!

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Okay all you hungry people. This week’s issue of PlaneBusiness Banter is now posted.

Whew.

This is the last earnings issue for the quarter, and that is a good thing.

Next week we can get back to our normal format and usual publishing schedule. Right before we embark on our Turkey day extravaganza.

But — before then — this week we have our hand’s full.

First, we have an update on the Rolls-Royce Trent 900 engine failure involving the Qantas A380. All the Qantas A380s remain grounded. Rolls still isn’t saying a lot. But everyone else sure is. Engines are apparently being taken off the A380 production line, Singapore Airlines has swapped out three engines already, and, well, this is a very serious situation.

It is going to make for a very serious dent in Rolls-Royce’s net profits as well, as you can bet all these airlines are keeping tabs on their expenses incurred and Rolls is going to receive the final bill.

Not to be left out, Boeing had its own problem last week with one of its 787s — as it was forced to land after a fire broke out in an aft electrical panel.

When we’re not talking aircraft and engines, we’re talking TSA.

As someone who is now faced with the prospect of having to go through an “extended pat down” every time I fly as a result of having a big piece of titanium in my hip, I am not happy about the new “group and grab” procedures.

Funny thing though — we received a number of notes this week from airline crew members. It appears that the TSA has pulled back on insisting on either the AIT scanner or the “extended pat down” for crew members. Not in all locations though.

No, the TSA has not issued an official backdown. But I’ve received enough notes to tell me that there has been a relaxation in the previous directives.

We also wrap up third quarter earnings coverage this week with our own “extended” look at Republic and Pinnacle.

If you took a look at the stocks of either airline and how they performed for the last week — you might have some questions.

In the case of Pinnacle, shares soared.

In the case of Republic, they did just the opposite.

We’ll tell you why.

We also go over the September DOT Airline Consumer Travel Report. And the September tarmac and cancellation numbers. Very interesting “rounding” of numbers going on here. We talk about all that as well.

There was a rather bizarre Airbus A380 order announced last week, the DOT and FAA sought to assure air travelers that they are working to make sure older aircraft are safe — only problem is that the efforts won’t take effect for years — and hey, the future King of England’s wife-to-be has two parents who met while working for British Airways.

We only talk about the important things here at PlaneBusiness Banter.

Subscribers can access this week’s issue here.

PlaneBusiness Banter Now Posted!

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Hello to everyone on what is a gloriously beautiful day here in the DFW Metromess.

Today I bring you another luxuriously long issue of PlaneBusiness Banter posted for your reading pleasure. Or as someone said to me last week at a conference I was speaking at, “I LOVVEE these issues. It gives me something to read during my entire flight!”

Yes, well. I’m so happy we can be of help.

Earnings season is finally winding down. We talk about three airlines in depth this week – Air Canada, WestJet and SkyWest. We also have earnings summaries for the last two reportees for the quarter — Republic Holdings and Pinnacle. We’ll talk more about them in next week’s issue.

But hey, there was a whole lot going on this last week besides earnings.

Shares of AMR, parent of American Airlines, had a great week, after Jamie Baker at JP Morgan Chase picked the stock as his current favorite. Kind of a no-brainer considering how badly beaten up the stock is — compared to its peers. According to Jamie, the company should start to see some improvement to its lagging margin performance as the British Airways joint venture kicks into gear. He said a lot of other stuff as well. More in this week’s issue.

On the labor front, the flight attendants at Delta Air Lines just said “No” to union representation last week. After 16 years and three elections, the Association of Flight Attendants couldn’t get it done. The AFA said it is going to protest the election on grounds the airline interfered.

Negotiations have clearly bogged down between the pilot unions at United and Continental. Sounds like pay scales for the United Boeing 747 is a major sticking point but that sticking point runs parallel to the other bigger problem — seniority.

As I say this week, you guys should not attempt to negotiate a contract unless the seniority agreement has been completed.

Meanwhile, in Dallas, the Allied Pilots Association has hired a professional negotiator. I think I said the union needed to do this about four years ago. Glad they finally took my advice.

The man they hired, Seth Rosen, is affiliated with the Air Line Pilots Association.

Interesting. I sense a thaw developing in relations between the two pilot unions.

Some notable tidbits from across the pond this week as well, including the fact that privately-held Virgin Atlantic confirmed it has hired Deutsche Bank to look at its “strategic opportunities.” This comes as reports also say Sir Richard may be ready to sell his interest in the airline. That would make sense. He would never be able remain at the helm as he is now if the airline were to be sold. He could never accept not being in charge.

But the most disturbing things we talk about this week have nothing to do with unions or earnings.

The first one — the uncontained failure of a Rolls-Royce engine on a Qantas A380 last week and the fact the airline says it has found other A380 Rolls engines with unacceptable levels of leaking oil.

Not good.

The second one — my first experience with the new TSA “extended” pat-down procedure.

Not good either.

More feedback on the TSA’s changed procedures from yet another pilot union this week — and we couldn’t agree more.

Speaking of “more,” — all this and more in this week’s issue of PlaneBusiness Banter.

Subscribers can access this week’s issue here.

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.