Tag Archives: American Airlines

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.

PlaneBusiness Banter Now Posted!

Happy Turkey Day Week everyone!

This week’s Turkey Day edition of PlaneBusiness Banter is now posted. Good thing too, because that chocolate walnut pecan pie is calling my name. Along with the pumpkin bread. And the smoked salmon. And the apple pie. And, you get the picture.

And tomorrow…..it’s TURKEY.

But before all that we give you the inside scoop on our little sit-down with execs at US Airways this week. No, it had nothing to do with the merger. It was, however, very constructive.

We also update you on the latest concerning the American Airlines/US Airways situation — including our updated timetable on a potential merger announcement, pricing of the deal, and our take on why pilots should or shouldn’t vote for the TA that has been sent out.

Meanwhile, up in Chicago, the folks at United suffered yet another IT-related hiccup last week. That’s three of them. Thankfully for them, it is now Wednesday evening pre-Thanksgiving and the airline seems to be behaving itself. Last time I checked.

Not too long after the airline had jumpstarted itself again last week, Jeff Smisek, United AIrlines CEO, personally greeted the airline dorks who were part of this year’s Star Alliance MegaDo around the world trip last week. We have the video. Furthermore, we really, really, liked his presentation.

Delta Air Lines rolled out a cool new onboard video this week. We give you a look at that as well.

Oh and we have lots of serious stuff as well. We have full 3Q earnings reports from WestJet and Air Canada. We have October traffic numbers. We have stock performance. We have 3Q break-even and operating margin rankings.

You name it — we have it. And more.

PlaneBusiness Banter is now ready to be devoured. Gobble, gobble.

PlaneBusiness Banter Now Posted!

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Good evening everyone. This week’s issue of PlaneBusiness Banter is now posted.

We’re almost done with 3Q earnings reports. This week we take an in-depth look at the recent earnings reported by two regional holding companies — Republic and Skywest.

We also have earnings summaries for WestJet and Air Canada. We’ll finish up the 3Q earnings parade in our next issue when we take a longer look at the results that both Canadian carriers posted.

In other news, the finalized tentative agreement between United Airlines and its two pilot groups hit the streets this week — and it is a monster. 500 pages long. I do believe this is a new record page length for tentative agreements.

We have not spent that much time with the TA, but at first blush it looks like a rather rich contract. Translation: This thing needs to pass.

On the other side of the universe, meanwhile, the negotiators at the Allied Pilots Association and American Airlines have come to terms on what is called an “Agreement in Principle.” The APA Board will meet Friday to vote on whether to send the proposal out as a TA to the rank and file.

But the biggest news this week concerns New York. Tuesday US Airways presented its argument as to why a merger with it is the best alternative to the AMR Unsecured Creditors Committee. Wednesday, American had its turn to convince the UCC why its “stand-alone” plan is the best alternative.

I find it extremely telling that the UCC would push forward with this — with no pilot contract in hand. It says to me we may hear something sooner than later from the UCC in regard to which proposal it favors.

You know where my money is on all this.

We have other earnings that we discuss this week including those from Emirates, LATAM, and Ryanair.

We also take a look at the sad state of affairs at SAS. The airline has given employees until Sunday to agree to draconian cuts in pay and pension benefits. Otherwise, a credit line that has been promised to the airline will not be forthcoming.

All this, DOT results from September (Delta kicked some ass, American fell apart and United managed to pick up a little ground) and much, much more in this week’s issue of PlaneBusiness Banter.

PlaneBusiness Banter Now Posted!

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Good evening everyone!

Surprise!

Tonight we publish our second issue in four days — as we try and work our way through the recent compressed pile of 3Q airline industry earnings reports.

In this issue we take an in-depth look at the recent earnings calls from Hawaiian Holdings, parent of Hawaiian Airlines; Spirit Airlines; and Allegiant Travel Company, parent of Allegiant Airlines.

All three airlines made money, but all three made profits in very different ways.

In addition, one analyst, Hunter Keay with Wolfe Trahan, brought up a very interesting idea for the folks at Hawaiian Airlines. He thinks, as I do, that the airline’s stock is very undervalued. In fact, the airline has enough cash in the bank today to buy itself, the market cap of the airline is so small. Of course the airline would need more capital than that to pull off an LBO, but I found Hunter’s argument very persuasive.

Aside from that, looking at the airline’s earnings results for the third quarter — while the airline is clearly grappling with some capacity/demand learning curves, the airline’s decision several years ago to look west to Asia for expansion — as opposed to putting more effort in the U.S. trans-Pacific routes looks like it has been, without question, the right decision.

We also talk about the 3Q earnings announced by Spirit Airlines. Spirit had a very nice profitable quarter, but the airline is spending a bit of money these days both to support its current growth spurt, and to make sure its operations run more smoothly.

I have no problem with either of these. The underlying business plan of Spirit is solid.

Our third in-depth earnings report looks at Allegiant. The airline has flopped around a bit the last couple of years as it decided to go with another fleet type, it had to get ETOPS certification for those 757s, the airline’s IT infrastructure had to be totally reconstructed and upgraded, it switched its position on how to deal with engine overhauls. You know — the usual. Growing pains.

But the airline seems to have weathered all of this fairly well. In addition, the airline’s move to put 166 seats in its MD-80s (no, I am not about to fly on one of those airplanes anytime soon!) is moving along and the airline is now getting a better read on the revenue payback from the additional seat installs. The news? Good.

All in all a very good quarter for all three airlines — but in very different ways.

In other news we talk about the latest tidbits from American, although there aren’t many, and we celebrate today — United Airlines 787 Day. Today the airline put its first 787 into regular commercial service. A fun time was had by all — as best we can tell. We had both friends and subscribers onboard at least one, if not more of the inaugural flights. Nothing like some good plane porn to make us all forget about the everyday trials and tribulations of life.

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

PlaneBusiness Banter Now Posted!

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Hello earthlings! It’s that time once again for the latest edition of PlaneBusiness Banter.

This week we lead off the 3Q earnings season with our in-depth look at Southwest Airlines. The airline reported earnings last week — the first airline to do so. We’ll tell you why we were not overly impressed with the airline’s earnings call and why we don’t like to be “teased” with the possibility of potential revenue enhancements by airline management. Either tell me you have a solution to the problem or you don’t.

This week? It’s a madhouse. Hawaiian Airlines reported Tuesday, and today we have US Airways and Delta Air Lines. Tomorrow we have United Airlines, JetBlue, Alaska. Allegiant is in there as well.

In other news, the pilots and management at AMR continue to negotiate. I’ve come to the conclusion it really doesn’t matter whether the pilots get a contract or not — although if I were a pilot, that 13.5% equity stake is definitely something to think about. But I still don’t think we’ll see a contract agreed upon and then voted in favor of by the pilot group.

I think it’s clear that the more important moves are now taking place off the radar screen and away from the negotiating table. We had evidence of this last week when two hedge funds accused American of ‘playing favorites’ with some of the other members of the UCC.

One way or another US Airways is going to do a deal here. It’s just a matter of how. And how much Tom Horton’s “go-away” package costs.

In other news, I traveled to Las Vegas last week where I had a wonderful session with the Advisory Council of Travel and Transport at their fall meeting. We talked about which airlines have been naughty and which ones have been nice to corporate travel managers. I’ll give you the scoop.

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

PlaneBusiness Banter Now Posted!

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Hello everyone. This week’s issue of PlaneBusiness Banter is now posted.

I’m not going to wax too poetic this evening, as I need to get up and out tomorrow for a trip to Las Vegas, where I will be presenting at Travel and Transport’s Fall Client Advisory Council.

So here is our Cliff Note’s version of this week’s issue.

American Airlines — check.

United Airlines — check.

Southwest Airlines — check.

Delta Air Lines — check

Emirates — check.

Randy Babbitt — check.

Steve Lott — check.

DOT Airline Consumer Travel Report numbers for August — check.

Airline stocks had a rather uneventful week last week — check.

Why We Think American Asking For An Additional 30 Days of Exclusivity Is Not A Bad Thing — check

Why This Week Is The Week A Pilot Contract Needs To Be Negotiated At American — check

What American Airlines’ Employees Attending A Branding Session on “Tone” Are Being Asked To Sign Before They Go — check

A New Airline Leasing Entity Is Poised To Become The Third Largest in the World — check

Have I piqued your curiousity yet? Well then you need to read this week’s issue of PlaneBusiness Banter.

If you’re not a subscriber already, what are you waiting for?

PlaneBusiness Banter Now Posted!

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Hello everyone. This week’s issue of PlaneBusiness Banter is now posted!

You know the drill. We lead off again this week with coverage of American Airlines.

This week we talk about how the airline now believes its seat problem is a result of passengers throwing gunk in between them. You buyin’ this? No, we aren’t either.

Monday also saw American CEO Tom Horton hobnobbing with IAG Chairman Willie Walsh in New York, as Qatar was officially announced as the latest member of the oneworld alliance. Actually the fact that Walsh managed to sweet-talk Qatar into the fold was the real story here.

But needless to say, American was quick to use the opportunity to do some positive spin of its own as the airline conveniently released its September traffic and PRASM estimates the same day.

Meanwhile, just hours before, Etihad’s marketing agreement (with more to come) with Air France/KLM was announced.

I said it when Qantas announced its deal with Emirates — the alliance system is dead. We’re going to see some big changes on this front going forward.

Airline stocks had a great week last week — with shares of US Airways and Delta leading the pack.

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

PlaneBusiness Banter Now Posted!

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Good evening everyone! This week’s issue of PlaneBusiness Banter is now posted. We are a bit long this week, but not surprising. There is a lot of stuff going on, including the continued operational issues at American Airlines.

Then again, the American story took another turn over the last week, after the airline suffered at least three incidents in which seats on an American 757 came loose while in-flight.

We talk at length this week about how the airline botched the handling of the story, how the airline continues to get beaten up in the press, and why all of this just validates what we already knew –the management team at the airline needs to change.

I’m not sure how much longer all of this is going to continue, but apparently Tom Horton has dug in his heels and is committed to walking away with what some folks have estimated could be as much as $60 million in bankruptcy exit payouts.

Ridiculous.

Meanwhile, United Airlines has quietly rolled out is new easy-peasy customer service GUI that alleviates the need to go back to the green screen. Everything we hear about the switch has been positive. Would have helped if the airline had done this six months ago, but what the hey.

Speaking of United, CEO Jeff Smisek was on CNBC last week talking about the airline’s new 787s, er, the “game-changer.” I have officially banned the use of that word again. I think it’s become a parody. I don’t want any United execs to use it again.

Time to come up with a new marketing tag. That one has gone stale. Causes acute rolling of the eyes of customers and employees alike.

Delta, United, and US Airways all updated their September PRASM numbers and their 3Q results over the last week. US Airways and Delta should still post a small uptick in PRASM for September, but the increase is going to be less than forecast. As for United Airlines, the airline looks like it continued to underperform its peers by a significant margin in September — and it looks like the airline will do the same for the quarter.

Meanwhile, analyst 3Q estimates for US Airways were raised substantially today as the airline forecast lower fuel prices and lower maintenance costs than expected.

We answer a number of subscriber questions this week on AMR — subscribers can send us any question they want to have answered. We’ll try and print as many as we can each week.

Some labor news from the last week: We’ll talk about both the flight attendants and the pilots at US Airways.

We also run down the 3Q airline sector stock performance results this week — as well as our normal weekly look at which stocks fared well last week and which ones took a vacation.

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