Monthly Archives: January 2013

PlaneBusiness Banter Now Posted!

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Hello everyone. It’s that time again. That’s right — it’s earnings time in PlaneBusiness Banter.

This week we roll out our “All-New” PlaneBusiness Earnings Review format, which I hope subscribers will find easier to dissect, peruse, and digest.

This week we take our in-depth look at the results reported last week by Delta Air Lines, US Airways, Southwest Airlines, and United Continental Holdings, parent of United Airlines.

Short and sweet? Delta Air Lines blew away the competition in 2012, but US Airways had a record breaking profitable year as well. It really is gratifying to see two major U.S. airlines turning out such great financial results.

United? The slog of its merger integration continues. 2012 was not a good year and it was really not a good quarter for the airline. However, we certainly detected a change in tone on the airline’s call this quarter — for the better — and we are looking forward to watching the airline as it tackles 2013.

While it seems the airline now knows what it has to do — now it has to do it.

Then there was Southwest Airlines. (We’ll talk about Alaska Air Group and its results in next week’s issue, along with Allegiant, Hawaiian and JetBlue.)

The results from Southwest were not overly impressive. In addition, analyst Jamie Baker with JP Morgan got into a rather interesting discussion with management at the airline concerning “brand.”

In a follow-up note to investors, Baker made the point that it seems the airline continues to make decisions based on brand, and not necessarily maximization of returns to investors and improved profitability.

It is an interesting concept, and we basically agree with him.

Of course we talk about about the American Airlines-US Airways merger process. Lots of things to talk about on that front this week, including our take on the rumors that Tom Horton, who is currently Chairman, President and CEO of AMR, might possibly stay on with the merged airline in some capacity — perhaps Chairman.

To say this story caused an avalanche of emails at the Worldwide Headquarters today would be an understatement.

Then there is Boeing — and that little problem of battery fires on its 787s. Boeing reported earnings today. We’ll catch you up on the latest with the company’s comments concerning the 787, and we update you on the latest progress in the hunt to find out just what the problem is.

All this, and much, much, more, including the Republic Holdings/AMR/Embraer deal, in this week’s issue of PlaneBusiness Banter.

PlaneBusiness Banter Now Posted!

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Hello everyone! It’s that time again. This week’s issue of PlaneBusiness Banter is now posted.

Fourth quarter and year-end earnings reports began to roll out this week, as Delta Air Lines reported on Tuesday and US Airways reported record breaking results on Wednesday.

The two airlines continue to lead the major U.S. airlines in any number of financial metrics. Looking forward, both airlines also gave analysts good guidance for 1Q13.

As we usually do, we will have full earnings call reviews of US Airways and Delta Air Lines in next week’s issue. We will also cover the results from Southwest Airlines and United Airlines — both of whom are on tap for tomorrow.

In other news, we update subscribers on the latest news concerning the battery problems with the Boeing 787 that have kept all of the aircraft grounded. The NTSB is scheduled to hold a press conference Thursday, but the latest news late Wednesday is that there was damage to all of the cells in the battery that caught fire on the JAL aircraft when it was parked in Boston.

Boeing’s not happy.

But neither are Boeing’s customers.

Meanwhile those planes aren’t going anywhere until the reason for the problems are found and the problems are solved.

American Airlines? Oh, yes. American decided to forge ahead and roll-out a new livery and branding effort last week. I talk a great deal this week both about what it says that management at the airline decided to do this — at this time. And how god awful the new design is. Or as the article in Vanity Fair titled its story on the new livery, “Something Lousy in the Air: Analyzing American Airlines‘ Disastrous Redesign.”

Needless to say, the airline failed on all fronts.

We also update you on our latest merger timetable — and I remind all of the stakeholders in this bankruptcy of what will happen if the current management team at the airline manages to kill a merger in some form or fashion. But I am not the only one sounding this warning. So did a Wall Street analyst last week.

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

PlaneBusiness Banter Now Posted!

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Good evening sports fans, airline fans, and Boeing 787 meltdown fans.

No, it has not been a good evening for the 787, as both Japan Air Lines and ANA have now grounded their 787 fleets after yet another “battery” incident that necessitated an emergency landing by an ANA aircraft earlier this evening in Japan.

Before this latest development, we had already devoted a fair amount of ink this week to the Boeing 787 problems — including the investigation into the systems and design of the aircraft, which was announced Friday by the FAA.

We also update readers on the NTSB investigation of the fire last week on the Japan Airlines 787 in Boston. And no, those pictures of the burned out Lithium battery are enough to scare the you-know-what out of you. Especially when you factor in the news that it apparently took 40 minutes for fire fighters to finally put out the fire.

Other than continued scary moments with the 787, we also talk a bit this week about the American/US Airways merger — which seems to be inching forward, although we hear the diehards at AMR refuse to give up on the misguided idea that a standalone deal would be preferable, so an announcement may not be as close as we had estimated.
Some people just refuse to accept the fact the world has changed.

Shame.

Meanwhile we all know how this works. Giving up valuable turf is never easy.
Just ask the guys at APA who are obsessed with what their seniority number is going to be. Nothing else matters.

On the international front, Alitalia needs money again, and Kingfisher continues to operate. Kind of.

Meanwhile, German authorities say that Ryanair has been cheating it out of lots of money, by under-reporting landing weights. This one should be interesting to see how it plays out.

We have the November DOT Air Travel Consumer Report this week, plus December traffic and RASM estimates (what the hell happened to Spirit in the fourth quarter, speaking of RASM) and we tell you why we think 2013 is going to be one heck of a good year for the industry.

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

PlaneBusiness Banter Now Posted!

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Good evening everyone!

The first issue of PlaneBusiness Banter for 2013 is now posted. And yours truly is sick as a dog. As a result, it’s going to be a short summary tonight.

I am desperately in need of more tea, more medicine, more chicken soup, and more sleep. Bleech.

However, before I crawl away and climb under the covers, here’s a peek at what we are talking about in this week’s issue.

Taking the top spot of course are the problems with the Boeing 787. The week began with a fire on a Japan Airlines 787 in Boston, and it’s pretty much continued to go downhill ever since. I think it would be safe to say it’s not been a good week for our friends at Boeing.

Since we did just end both a year and a quarter, we have all kinds of airline stock charts for you to peruse this week. Taking the top spot for performance in 2012 were shares of US Airways. The shares picked up a cool 166% for the year.

On the American/US Airways front, we expect we should hear something formal in terms of a merger agreement before the end of the month. My bet is the announcement is made before US Airways releases its earnings. Stay tuned.

This week we talk a lot about Southwest Airlines. Taking the cue from analyst Bob McAdoo from Imperial Capital, we revisit the information the airline released at its recent investor day in December — and we note the airline has already been forced to backpedal on some of its announced increases in fees it made that day.

Like I say, we talk a long time this week about the airline. And not a lot of it is overly enthusiastic.

We also bring you a super secret list of New Year’s resolutions. That’s right. We have the New Year’s resolutions from a number of airline CEOs — both current and past.
As for the AMR Bankruptcy Follies — this week we dissect the “Bob Crandall” video that had so many people talking while we were on Holiday Hiatus.

An American Airlines‘ exec leaves to become CEO of Virgin Atlantic, we give you a look at the messages several airline CEOs sent to their employees at the end of the year, and we even update you on Pinnacle, which, as everyone had assumed, is going to exit bankruptcy as a wholly-owned subsidiary of Delta Air Lines.

All this and more (cough, cough) in this week’s issue of PlaneBusiness Banter.