Monthly Archives: June 2011

PlaneBusiness Banter Now Posted!

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Hello all. Is everyone ready for the Fourth of July Weekend? Not before you read this week’s issue of PlaneBusiness Banter.

This week we are talking a lot about what happens when airlines have to deal with stories that go viral with a vengeance.

Last week three airlines had to face situations that forced them to call upon every piece of social media/internet knowledge and expertise they had. US Airways, Southwest, and Delta Air Lines all handled difficult situations differently. What did they do right, what could they have done better?

AMR, UAL, and Delta filed updated second quarter guidance with the SEC. Looks like Delta Air Lines will meet its 10% RASM goal for the quarter, but maintenance costs are running higher than anticipated. Both UAL and AMR said that RASM numbers will come in lower than expected. AMR looks like it will have another sub-peer quarter — or so says Bank of America/Merrill Lynch analyst Glenn Engel.

The decision by the U.S. and key allies to release 60 million gallons of crude oil announced last week had a huge effect on oil prices and jet fuel last week. That news was responsible for a huge uptick in airline stocks on Thursday. But Friday the second quarter updated guidance sent stocks plummeting. Up down, up down.

It’s always something, isn’t it?

There was an Air Show last week. In Paris. We’ll take a look at the final tallies….but more importantly, has Boeing received the message yet? You know. The message that says, “Airlines want to fly aircraft that save them money.”

We talk about Air France/KLM flights that will fly using biofuel this fall, Sir Richard Branson’s personal letter to his pilots in which he essentially begs them not to strike, and we wonder whether all the flak concerning American Airlines’ new boarding policy is on target or not.

All this and more — in this week’s issue of PlaneBusiness Banter. Subscribers can access this week’s issue here.

PlaneBusiness Banter Is Now Posted!

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Hello earthlings.

Another rough night of weather here in the DFW Metromess. But have no fear. This week’s issue of PBB is now posted and a great issue it is. This week we announce the 2011 PlaneBusiness Wild Turkey Award recipient. Drum roll please.

This year the award goes to Bill Ayer, Chairman and CEO of Alaska Air Group.

While PlaneBusiness Banter subscribers are all too aware of the excellent job Alaska is doing on the financial side of the house, very few people know that much about the airline’s Chairman and CEO. That’s because Bill Ayer wants it that way. He is not one to bask in the spotlight. He prefers his employees do that — in recognition of their work.

But this week Bill has best be prepared to bask in the spotlight, or at the very least he had best prepare for the delivery of a case of Wild Turkey Rare Breed, compliments of the man for whom this award is named. That’s right. Herbert D. Kelleher.

Better known in most circles simply as… Herb.

In addition to our Wild Turkey award column, we have a very active letters section this week in which our subscribers talk about everything from Steve Hazy’s business model at ILFC to the TWA pilots lawsuit against ALPA. Oh, and yes, my rant last week on airline marketing and branding, or in most cases, the lack thereof. I post a few of the comments I received this last week on that column, but there are still more coming in. We might have to revisit the topic.

There was some chatter this week concerning the United/Continental pilot negotiations, but as I report tonight, I don’t see any positive progress on this front. Later this week ALPA President Lee Moak will be meeting with a joint meeting of the MEC’s from both airline pilot groups. How I would love to be a fly on the wall of that session.

On the American Airlines labor front, some good news this week. It sounds like the negotiators for the TWU, which represents the mechanics, and the airline, had a productive mediated session last week, and they have scheduled another meeting for two weeks from now in Dallas.

American and the Allied Pilots Association, also appear to be finally making some headway in their unmediated discussions. Again, good news.

Shares of Air Canada led the airline sector to its first positive week in a long time last week, as shares shot up 15% after the strike against the airline by its customer service employee group came to an end.

Oh. Yeah. There is an air show in Paris this week.

We give you our four quick takes this week on some of the more interesting tidbits we’ve heard coming out of Paris, and next week we’ll wrap up with a full rundown of who announced what. And maybe even…why.

One thing that is certainly clear — Boeing has best get off its you-know-what and come up with either a replacement aircraft design or an upgrade to its existing 737 product. Airbus now has banked almost 600 orders for its A320neo. Ryanair announced this week it has signed a “design” agreement with Chinese aircraft manufacturer Comac, to help the company design a Boeing 737 replacement aircraft.

As I reported in PBB after the recent Southwest Airlines annual meeting press conference, I don’t think I’ve seen Southwest CEO Gary Kelly respond as tersely as he did that day in answer to the inevitable “any news from Boeing about a 737 replacement aircraft” question.

Earth to Boeing….come in.

Finally, a big thank you to Brett Snyder, aka CrankyFlier . Brett gave us a very nice shoutout this week in his blog about the rant I went on last week concerning the importance of brand, and how some airlines get it, but most do not.

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

PlaneBusiness Wild Turkey Award for Airline Management Excellence

Next week — for only the third time in 14 years — I will award an airline CEO with the PlaneBusiness Wild Turkey Award. This award is given to an airline CEO in recognition of their excellence in airline management.

Yes, the award is named in honor of Herb Kelleher, former Chairman and CEO of Southwest Airlines.

What does it take to grab one of these (and the case of Wild Turkey Rare Breed whiskey personally delivered compliments of the award’s namesake?)

*A dedication to a strong balance sheet.

*An emphasis on a company’s employees and the importance of their contribution to the company.

*A position of leadership within the airline community.

*A willingness to take risks — in an effort to improve an airline’s financial and operational success.

*Above all — a commitment to “do the right thing” in regards to the airline, employees, shareholders, and customers.

That’s next week — in PlaneBusiness Banter.

PlaneBusiness Banter Now Posted!

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Republic Holdings announces details of Frontier Airlines exit strategy — Frontier pilots getting equity stake in company in return for concessions. Judge decides in favor of US Airways over USAPA — could mean an eventual court determination of just what seniority agreement is used. American Airlines and American Eagle had a hellacious April — operationally speaking. And this is just the start of this week’s PlaneBusiness Banter.

Hello everyone from the home of the newly minted NBA World Champion Dallas Mavericks. My condolences if you are a Miami Heat fan. I think your team has some problems. Well, maybe just one.
This week the Association of Travel Marketing Executives met in Boston. Great group. I was honored to speak to them a few years back. In honor of their get-together this week I talk a bit about airlines, marketing, and branding in this week’s issue. As many of you know, I was a marketing and advertising maven long before I went to work on on the financial side.

But we talk about a lot of other things this week too, including a recent court decision involving the woefully dysfunctional pilot group at US Airways. With the federal district court throwing out a motion from USAPA to dismiss the airline’s complaint for declaratory relief, the stage is now set for the court to eventually decide the union’s seniority fight. But it’s going to take a while.

All pilots at the airline should welcome any effort that could bring the union closer to a seniority agreement – no matter which agreement it is. So much time has elapsed now since the US Airways East pilots bolted ALPA over their opposition to the Nicolau seniority award , and so much money has been lost by pilots in both camps as a result — that at this point I don’t think there is any other choice — but to let the courts decide. I can’t see these two groups coming to terms on their own on a seniority agreement.

The situation with the US Airways East pilots is, without question, the most ridiculously unnecessary labor situation I’ve ever seen in this industry. And I’ve seen quite a few union/labor issues in this industry over the last 17 years.

Another horrific week for airline stocks last week. We’ll update you on the latest oil price and jet fuel prices — and we’ll look at last week’s OPEC follies. And why Saudi Arabia has decided to up oil production anyway.

As I said, we talk about other things this week as well — so subscribers, come on in and catch up on the latest. If you are not a subscriber, click here to get more information on subscribing to PlaneBusiness Banter.

Kelleher Measure On Dallas CIty Council Agenda Wednesday

A heads-up for all DFW based readers who might want to do something different, yet still airline-related Wednesday morning.

On the agenda tomorrow morning at the Dallas City Council Meeting is a proposal that would see the council rename Cedar Springs Road from Mockingbird Lane to the Dallas Love Field Terminal.

The new name that is going to be proposed? Herb Kelleher Way.

We hear that Mr. Kelleher, the irrepressible ex-CEO of Southwest Airlines, is expected to attend the meeting, which starts at 9 A.M. Location? Council Chambers, City Hall.

No word on whether or not Wild Turkey will be served at the event.

PlaneBusiness Banter Now Posted!

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Hello everyone. It’s Tuesday night. That means two things. One — this week’s issue of PBB is now posted. Two — the Mavericks and the Heat are on television. Now. Consequently my summary comments about this week’s issue are going to be mercifully brief!

In this week’s issue we talk a great deal about lawsuits. Yes, that means we are talking about American Airlines and its escalating legal fight(s) involving Sabre, Travelport, and Orbitz.

Speaking of Orbitz, American Airlines got a rude awakening last week when a court informed the airline that it once again had to provide fare inventory to Orbitz. I somehow don’t think American Airlines expected this — especially considering the airline had just rolled out a new television advertising campaign in which the airline touted the fact that AA.com had American Airlines fares — and Orbitz did not.

BZZZZT. Surprise!

Another surprise last week? The mechanics at United Airlines turned thumbs down on their highly touted tentative agreement. When I say “highly touted,” both the Teamsters and the airline had publicly lauded the deal in March.

So much for that.

We talk about why the deal failed. And why we think the Teamsters probably shoulder a lot of the blame. We also check in with the ongoing pilot negotiations at United.

Airline stocks had another rough week last week, as both employment and housing numbers released last week were nothing short of grim.

Oil prices remained flat last week, as did jet fuel, but fears the U.S. economy could be slowing down took their toll on the sector.

In the good news department, the traffic reports from May that have rolled across the transom already have, for the most part, looked good. Looks like May was a good month overall — just as those wily airline executives had indicated at the recent Bank of America/Merrill Lynch Global Transportation Conference.

We have a lot of subscriber letters this week, and we also take a retro look back at the offer Donald Trump made for American Airlines in 1989.

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