Tag Archives: US Airways

PlaneBusiness Banter Now Posted!

home-typewriter copy 1.jpg Good evening everyone. This week’s issue of PlaneBusiness Banter is now posted.

This week we have a big, jam-packed issue — and it’s not even earnings yet!

First, we award our Wild Turkey Award for Airline Management Excellence to a very worthy recipient — Richard Anderson, CEO of Delta Air Lines.

We’ve only given out four of these in our 15 years of publishing PlaneBusiness Banter, but we tell you why we think Richard is more than deserving of the honor.

As part of the award, Richard will also be receiving a case of Wild Turkey Rare Breed whiskey, compliments of the person for whom the award is named — former Southwest Airlines Chairman and CEO Herb Kelleher.

Yep, Holly was in Atlanta last week.

I got to tour the new International Terminal at the Atlanta Airport, I got to crawl around one of Delta’s newly upgraded 747s, I met with almost every top member of the airline’s management team, and then there was a terrific dinner with some of the folks from Corp Comm — complete with green fried tomatoes and fried chicken.

What more could anyone ask for?

Meanwhile, while I honor the best in the business this week, in terms of airline CEOs, we still, unfortunately, have to talk about AMR and its CEO.

In this week’s AMR Bankruptcy Follies column, I take a look at the statement last week from the airline in which it says it is now going to look at “merger alternatives.”

We present a timeline of comments from the airline’s CEO Tom Horton for you to consider as we ask the question — is Horton really serious about doing this or is this just a ploy to placate the UCC?

We take a look at the June traffic numbers, and we’ll tell you why shares of SkyWest shot off the charts last week.

Oh, and yes, Boeing locked down the order with United. The FAA also proposed a $13.2 million fine against Boeing — for its slow response to fuel tank modification design work.

We take a look at the latest DOT Air Travel Consumer numbers from May — yet another bad month for United — and we talk about British Airways, Kingfisher, Qantas, Virgin Australia, and a whole lot more.

All — this week — in PlaneBusiness Banter .

PlaneBusiness Banter Now Posted!

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Good evening earthlings. This week’s edition of PlaneBusiness Banter is now posted.

While yours truly enjoys her digs in Chicago this week, as I hang with the folks at the American Travel Marketing Executives Conference and United Airlines, there is a lot going on in my usual environs down in the DFW Metromess.

This week I tell you why I think the board of the Allied Pilots Association will vote this week to send a contract proposal between it and American Airlines out for a vote. I explain why this does not mean that the APA no longer supports a merger deal with US Airways. And, I also talk about why, if you are a drama queen, you will certainly like July. We ain’t seen nothin’ yet folks.

In our AMR Bankruptcy Follies column this week, I take a look at two recent articles/editorials in the Ft. Worth Star-Telegram. We are not impressed when people who should know better treat a complex bankruptcy situation with such obvious disregard for the facts.

Meanwhile, downunder, Qantas CEO Alan Joyce was yelling loud and clear last week about the dangers of Etihad buying into Virgin Australia. While usually I listen to these types of complaints with a very skeptical ear — in this case Joyce may have a good point. Etihad could, if it wanted, purchase 100% of Virgin Australia. But Qantas is limited in how much foreign investment it can accept.

No doubt about it. Australia has become a hugely competitive market — both in terms of its international routes and on the domestic front.

In our email bag this week, we’re talking about whether or not yet another suitor could come out of the woods for American Airlines, and we discuss the potential for further changes in the United Airlines‘ C-Suite.

On Wall Street last week, airline stocks frolicked, as the price of both crude oil and jet fuel dropped dramatically. Who were the biggest gainers? We’ll let you know.

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

PlaneBusiness Banter Now Posted!

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

In this week’s issue we give you our take on what we think Ryanair is up to with its announced deal for Aer Lingus, we talk about the recent North Texas visits of US Airways executives, and we share what we think is the Kodak Moment of the Week from the recent US Airways’ Annual Meeting in New York.

Meanwhile, the 1113 process continues in the American Airlines bankruptcy. We think we’ll hear about a deal between the airline and the pilots this week — and it’s now up in the air as to whether Judge Lane will rule on Friday or not. He could rule on all three contracts, although APA has now formally requested a stay. Or, he could delay his ruling if he believes there is a chance for one, if not two of the unions to come to terms.

No, we don’t think the APFA will come to terms. Their contract will be abrogated.

Remember — all of this is part of the bankruptcy process. The 1113 proceedings have to come to a conclusion before the bankruptcy process can move forward, i.e., a US Airways plan be formally presented to the UCC.

As our Kodak Moment of the Week clearly shows, union leadership at the airline still solidly supports a merger with US Airways.

In other news, Delta Air Lines held its annual meeting in New York last week as well and CEO Richard Anderson talked a bit more about the airline’s refinery project. We talk a bit about that. And yes, to answer some recent questions — we like the idea a lot.

Airline stocks had a sloppy week last week, with the exception of LAN and GOL. The merger between LAN and TAM is now expected to become official on Friday, after an unexpected hold-up involving TAM shareholders. As we explain, this is no big deal, and after Friday, the largest airline in the world, per market capitalization, LATAM, will be based in Latin America.

The DOT April Air Travel Consumer Report was issued last week. All and all, a pretty good month for the airlines — particularly in terms of on-time performance and lost bags. But there were some airlines that did not fare quite as well as the others — and we’ll let you know both the good and bad news from the report.

As always, all this and more in this week’s issue of PlaneBusiness Banter.

PlaneBusiness Banter Posted!

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Hello all.

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

This week we have a little bit of this and a little bit of that. First, we look at the latest effort by American Airlines to present its view of the world, i.e., its “truthiness” regarding its future prospects as a “Standalone” airline. Now the airline has resorted to asking business partners for what amounts to a reference letter.

Amazing what a company has to do when it can’t find one independent Wall Street analyst to say they endorse the plan you say is your best option coming out of bankruptcy.

Meanwhile on the other side of the world, oneworld partner Qantas just lost $1 billion in market capitalization as investors clearly are not happy with the fact the airline is now slated to post its first annual loss since the stock went public in 1995. The stock dropped to such low levels last week that the airline has been forced to hire an advisor to help keep potentially hostile takeover bids away. But I doubt that the hiring of such a firm will be of much use. Former CEO Geoff Dixon is supposedly heading up one such group.

Meanwhile, Emirates said this week it remains on track to enter into a “commercial” agreement with the airline — but not as an equity partner.

U.S. major airlines seem poised to begin slapping $25 fees on oversized carry-on bags. We like the move — and don’t think passenger rights groups should be upset over all this. All the airlines are doing is leveling the playing field and stopping the abuse of the carry-on rules as they exist now. So everybody — just chill. The fees that are being considered are for “oversized” bags. Not normal bags.

Airline stocks had a fairly good week last week — while the rest of the markets stumbled. Again — the more fuel prices decline the better it is for airlines.

At the IATA Conference in Beijing this week the IATA set out an ambitious goal — to bring peace to the fight between airlines and GDS companies. We’ll see how all this shakes out.

Meanwhile China and the EU stepped up their game of chicken over China’s unwillingness to participate in the EU’s carbon emissions scheme.

Singapore Airlines launched its low fare long-haul “Scoot” last week. Not a product I am jumping up and down to fly on — but it’s yet another attempt by a major Asian airline to tap into the low fare market.

All this and more, including a ton of reader mail, in this week’s PlaneBusiness Banter.

PlaneBusiness Banter Now Posted!

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Hello everyone.

For those of you who are subscribers and print out PBB, I warn you — this one is probably going to be more than 150 pages. Yes, it is a return of the “Killer Earnings Issue.” (Insert screams here.)

This week we’re looking at the recent earnings calls of Delta Air Lines, United Airlines, US Airways, and JetBlue Airways. Only one of the four made a profit. Do you know which one?

The laggard in the bunch was definitely United Airlines. The airline’s 1Q revenues clearly showed the effect of the airline’s SHARES cutover. The problem? The airline still has a number of cutover issues that have yet to be resolved — and these issues directly affect the ability of the airline to capture additional revenue and/or they concern upgrades.

Between all this and the usual problems that any merger comes with — this year is looking more and more like a transitional year for United.

Delta AIr Lines, on the other hand, produced excellent revenue during the quarter, as did US Airways and JetBlue.

As we also note in our comments about US Airways’ results, the airline continues to be a great poster child for our “Just Say No to Fuel Hedging” campaign.

The airline posted a relatively small loss for the quarter — with no fuel hedges in place.

This week, Delta Air Lines announced that yes, it is going to purchase an oil refinery. When you stop snickering, I’ll tell you why I like the move.

Hawaiian Airlines‘ shares had a nice gain last week — the result of better than expected earnings results and strong guidance. Meanwhile. shares of US Airways picked up even more ground last week. For the year, our favorite trading stock (per our comments in January) has picked up more than 103%.

Of course no issue of PBB would be complete now without the latest addition of the AMR Bankruptcy Follies. This week we talk a little about Harvey Miller — the ex-Lorenzo attorney who is AMR’s lead restructuring counsel. We also tell you how much he is charging AMR by the hour. After you recover from that nugget, you can read our take on the airline’s attempt to negate the significance of the airline’s three unions and their signed term sheets with US Airways, and we talk about some of the comments that came out of last week’s court testimony.

Yes, apparently AMR did have another strategy besides the ‘Cornerstone Strategy.” It was the “Limp-Along” or “Kick the Can” strategy.

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

PlaneBusiness Banter is Now Posted!

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Good evening Earthlings.

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

The last week has been brutal. I’m not kidding. First, we had two airlines report earnings last week, and we have the full review of the earnings call this week from Southwest Airlines and Alaska Air Group.

Our short take? Alaska turned in a respectable quarter — especially considering the airline used to simply assume it would post a loss in the first quarter. Not anymore.

This was also Alaska CEO Bill Ayer’s last earnings call. Ayer, one of the best CEOs in the business — will remain as Chairman. Should investors be worried about this change at the top of one of the most well-run (and profitable) U.S. airlines? No. I’ll tell you why.

As for Southwest, the airline has us totally confused.

It keeps pushing back dates for various merger-related integrations with AirTran. That we get. The airline clearly, as many of us said at the time the deal was announced, did not and still does not have the technology underfoot to make this deal work.

That includes the technology necessary to enable Southwest to fly internationally. Or to merge fully with AirTran. And then there are the fees that AirTran charges as part of their operation. An operation that, in a number of ways, performed better than Southwest in the first quarter.

Now they say they are going to keep all fees that are currently a part of the AirTran model in place. For at least 2-3 years.

Say what?

So now the “we’re going to migrate the AirTran operation into that of Southwest as quickly as possible” mantra has changed.

But why? The airline could switch off the fees at AirTran overnight.

Could it be Southwest is finally beginning to understand the value of “the upsell?”

No. Otherwise they wouldn’t be putting more seats in its 737-700s.

See what I mean about confusing?

About the best news out of Denton Drive last week was the news that the airline has finally made a decision about upgrading at least some of its IT incapability.

The airline announced it was going with Amadeus — and will use that company’s res product to enable it to start international operations. But not until 2014.

(Actually I think we’ll see Amadeus take both the international and the domestic PSS projects on at Southwest before this is all over.)

But clearly the major news last week was the announcement Friday that the three major unions at American Airlines had signed term sheets with US Airways — in effect telling management at AMR they want no part of a standalone airline — and pretty much throwing out a vote of “No Confidence” towards the current AMR management.

Needless to say, the fact the pilots did this pretty much confirms what we had said here last week — that the “Hale Memo” was a farce. Clearly Mr. Hale just signed his name to something that had no truth attached to it whatsoever.

And then the powers that be at AMR wonder why it is that their employees don’t trust them. Funny how that works.

We talk a lot about what happened last week, tell you what you can expect to see happen in the next weeks and months, and why you shouldn’t think that things have stopped happening just because they aren’t happening in public.

No question about it — the actions of the three union leaders and their boards last week was amazing. Something we’ve certainly never seen in this industry before.

No surprise — shares of US Airways climbed sharply last week on the news of the union agreements.

In addition, did you hear about the lawsuit that AIG, parent of ILFC has filed against Steve Hazy, the founder of ILFC, and currently the CEO of Air Lease Corp.?

The really bizarre part of the story — all the major players were in New York at the Plaza Hotel for the Air Finance Conference this week when the news hit.

I would think that might have made things just a tad uncomfortable.

As always, we have all of this and more — in this week’s issue of PlaneBusiness Banter.

Breaking: Three American Airlines Unions Sign Term Sheets with US Airways

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Here we go.
Just minutes ago, a joint statement was issued by the three unions that represent more than 55,000 American Airlines’ employees. Concurrent with that, US Airways issued an 8-K with the SEC.
The situation we have is this: All three unions have signed term sheet agreements with US Airways, and have now publicly thrown their support behind a merger between US Airways and American Airlines.
See below for the union statement:

_____________________________________________

ALLIED PILOTS ASSOCIATION, ASSOCIATION OF PROFESSIONAL

FLIGHT ATTENDANTS AND TRANSPORT WORKERS UNION JOIN IN

SUPPORT OF AMERICAN AIRLINES-US AIRWAYS MERGER

Union Leaders Pursue Best Path to Restore American Airlines to Preeminence

Fort Worth, Texas (April 20, 2012) — The Transport Workers Union (TWU), the

Association of Professional Flight Attendants (APFA) and the Allied Pilots Association

(APA) issued the following joint statement today:

“On behalf of nearly 55,000 American Airlines front-line employees—including

the 17,000 members of the Association of Professional Flight Attendants, the 10,000

members of the Allied Pilots Association and the 26,000 members of the Transport

Workers Union—we are pleased to confirm our support of a possible merger between our

airline and US Airways. We have reached agreements on terms sheets for collective

bargaining agreements that would govern the American Airlines employees of the

merged airline with US Airways.

“This significant step represents our shared recognition that a merger between

American Airlines and US Airways is the best strategy and fastest option to complete the

restructuring of American Airlines, enabling it to exit the Chapter 11 bankruptcy process

and restore American Airlines to a preeminent position in the airline industry.

“As envisioned, a merger of US Airways and American Airlines provides the best

path for all constituencies, including employees of both American Airlines and US

Airways. The contemplated merger would be based on growth, preserve at least 6,200

American Airlines jobs that would be furloughed under the company’s standalone

strategy, and provide employees of both American and US Airways with competitive,

industry-standard compensation and benefits. Over the long term, the combined new

airline would support greater job security and advancement opportunities for both

American Airlines’ and US Airways’ employees that are far superior to those available to

employees at either airline on a stand-alone basis. Importantly, by avoiding a lengthy and

contentious 1113 process, the new carrier would be able to emerge from bankruptcy more

quickly.

“A merger would create a foundation to establish American Airlines as a vigorous

competitor of the two larger network carriers and the industry at large. Customers of both

airlines and air travelers in general will benefit greatly from a viable third network carrier

and significantly enhanced travel choices.”

That is the full text of the unions’ joint statement.

PlaneBusiness Banter Now Posted!

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Hello everyone.

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

This week we are talking a lot about — what else? American Airlines and whether the airline should continue in its attempt to come out of bankruptcy as a standalone carrier. Or if, perhaps, it should listen to what many Wall Street analysts are saying, what we are saying, and what a lot of employees believe — that a merged entity would provide a better opportunity for the airline.

Not only that, but an agreement pertaining to a merged entity would then allow the airline to use bankruptcy to tailor the airline more effectively. And efficiently — taking into account the much larger airline that would be created.

This last week the airline and its handlers definitely went on the offensive as it attempted to sway opinion using old-school PR tactics. The attempts didn’t gain much traction, and we talk about why they didn’t. Short reason: you just can’t do that kind of stuff today and expect it to hold up. Times have changed.

In addition, the unions at American came out with their own missives last week, including one in which it implored politicians who don’t know what they are talking about to not comment on anything to do with the bankruptcy. Until all the facts are known.

I have never seen all three major unions at a bankrupt airline appear to be so in synch in a situation like this. Not a good thing if you are Tom Horton. I don’t think his recent exhortations to the pilots to “put the war paint on” had its intended result. In fact, I think it backfired.

Monday, all interested parties will be in bankruptcy court in Manhattan. From that point on, the timing is a bit nebulous, but if I were to guess, I would guess that US Airways will need to come forth in some fashion next week, if it is indeed serious in making an attempt at a merger.

American is slated to open up the hearing Monday with their side of the story, followed by presentations from the airline’s three unions. But that schedule may not be followed. Stay tuned.

But there was a lot of other news last week, including a standing-room only crowd down in Houston, where the Houston City Council took their first stab at a decision on whether or not Southwest Airlines should be allowed to fly internationally out of Hobby Airport.

As I say in this week’s issue, you rarely see consultants’ work so publicly ripped to pieces as members of the Council did this week. But that’s exactly what happened. They’ll be a rematch in about two weeks, at which time United Airlines will present its side of the story, and its study.

Speaking of Southwest Airlines, we hear that the airline should announce a new IT deal on Thursday. Or as one of our SWA friends put it in an email, “The ranking of the airline’s priorities has apparently changed.”

PBB subscribers will get the joke.

We had news this last week of yet another CFO departure, and late today, we heard that there will be another CEO departure in the next couple of months.

We also had an analyst change addresses.

Change, change, and more change.

That was certainly true with this month’s DOT Air Travel Consumer Report. The March numbers had a brand new denizen at the top of the on-time departure and lost bags rankings — Virgin America.

Meanwhile, on Wall Street, airline stocks were a bit down for the week, as was the market as a whole. Jet fuel rose modestly for the week.

Finally, my apologies for the delay in publishing this week, but we had an incident involving PlaneDad that kept us more or less occupied all day Monday and somewhat on Tuesday. He fell. No phone was accessible. He lives alone. He’s 92. Seventeen hours on the floor. He’s now in the hospital. Yours truly will be returning to New Orleans later tomorrow. You get the picture.

And yeah, it’s not a particularly pretty one.

Sigh.

On that note — go read this week’s issue of PBB. And if you are not a subscriber — why not?

PlaneBusiness Banter Now Posted!

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Hello earthlings. I would say good morning, but I’m not ready to concede that fact yet.

This week’s issue of PlaneBusiness Banter is now posted. This week we’re talking about airlines that are bankrupt, airlines that want to merge with airlines that are bankrupt, airlines that are trying to figure out how to merge with their partners who used to be bankrupt, and then there is the airline that wants to buy a refinery and produce its own jet fuel.

Never a dull moment in this industry.

This week we take a break from our American Airlines’ Bankruptcy Follies as we give you instead a summary from a panel discussion we participated in on Monday. The subject? “The Future of American Airlines.”

PBB subscribers are pretty familiar with most of what was discussed, which is more than I think was the case for most of the folks assembled at the Neeley School of Business at Texas Christian University in Ft. Worth.

Stand alone? Go belly up? Enter into a merger with another airline? Stand on the sidelines while their last chance at a major airline merger is snatched out from under their nose?

Trust me — there are a lot of scenarios here.

Twelve months out, those of us who participated on the panel will be able to see if our suggested thesis for the business case study –“Missed Opportunities” is still the case. Or if the long-term trend changes.

In other news, we talked to the folks at United Airlines last week about their continued cutover hangover. There does seem to be progress being made — and we’ll talk about that. We also talked to them about why the cutover had to be done on March 3 — and not after the new SHARES GUI was completed in nine months. We also ask the question that we were pushed to ask by subscribers — namely — was the airline motivated to do the cutover because there were management incentive payments in play?

We got answers to most of our questions. By next week, hopefully we’ll have the rest.

Meanwhile, down in Houston, Southwest Airlines wants to start flying internationally out of Hobby Airport. Needless to say, United, which is in the middle of a $700 million international terminal upgrade at IAH is not too happy about this idea. But it sounds like Houston is very happy about the thought of increased service, more money, and more jobs.

Let the fight begin.

Airline stocks had a pretty benign week last week — with one glaring exception. That of course was Pinnacle. Shares of the airline sank 60% after the airline filed for Chapter 11 protection.

And of course, we preview first quarter results, as they are just around the quarter. Long and short — we will have more airlines lose money for the quarter than post a profit.

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

PlaneBusiness Banter Now Posted!

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

This week we take an in-depth look at the recent earnings reported by both WestJet and Air Canada. On the surface, WestJet easily bested its Canadian competitor in terms of its fourth quarter performance, but WestJet is now in the process of starting a new regional airline. We talk a lot this week about my concerns about this new “WestJet Express” operation.

Meanwhile, how is Air Canada going to increase its revenues? The airline’s problems in that department overshadowed the airline’s cost reduction performance in the fourth quarter. Meanwhile, cost forecasts for the first quarter are daunting.

We also update subscribers on the latest from the American Airlines bankruptcy, and we take a look at what happened to airline stocks last week. Hint: The frenzy of the last few weeks finally came to a screeching halt.

Pinnacle Airlines got some good news last week however — and that news sent its shares soaring. We’ll update you on all that news as well.

All this and much, much more, including a very active mailbag — this week in PlaneBusiness Banter.