Tag Archives: airline stocks

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

We are almost done with fourth quarter 2011 earnings. This week we take an in-depth look at the results reported last week by Spirit Airlines and SkyWest Airlines.

I found both calls interesting last week — but for different reasons. Spirit notched the best operating margin of any North American airline for the fourth quarter. That was no small feat. It’s ROIC as nothing to sneeze at either.

As for SkyWest, the financial carnage associated with the airline’s ExpressJet deal continued during the fourth quarter, but there might, finally, be hope for 2012, although SkyWest will report a loss for the first quarter.

By the way, which aircraft that many operators seem to think is so desirable right now in the regional space does SkyWest’s CEO Jerry Atkin think may not be that important in the regional space five years from now? His answer may surprise some.

This week Republic Holdings and Pinnacle are slated to wrap up the sector’s fourth quarter results.

We also spend a lot of time this week parsing the latest bankruptcy filings for American Airlines. In particular, this week we take a look at the airline’s recent request to the bankruptcy court for $12 million dollars. Give or take. The airline wants the money so it can pay the Boston Consulting Group. (Just one of tens of consultants and advisors the airline says it has to have working for it.)

But the request for the BCG money is especially interesting to pick through.

Do you know what “The Cascade Project” is and what it supposedly is going to do for AMR and its management team?

We give you the scoop. We also tell you when BCG first started working with the airline.

I warn you though, if you have a weak stomach for corporate speak and consultant-eze, it may be hard to get down. And keep down.

We may have to force ourselves to parse the bankruptcy filings more carefully on a more regular basis.

Then again, maybe not.

As usual, 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.


PlaneBusiness Banter Now Posted!

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Good evening everyone.

This week’s issue of PlaneBusiness Banter is now posted. This week we’re talking a lot about the two airlines that call Dallas-Ft.Worth home — American Airlines and Southwest Airlines.

Last week Southwest Airlines rolled out its fourth quarter earnings results — making the airline the first to report for the quarter. Overall the airline posted numbers that were just a bit better than expected, although the “noise” from the airline’s merger with AirTran will continue into 2012. The airline also updated its list of AirTran cities it is keeping and those it is putting on the “Don’t fly there no mo” list.

Were there any surprises here? Yep. On both sides.

Meanwhile, the bankruptcy continues at American Airlines. Monday Human Resources SVP Jeff Brundage sent out a letter to employees trying to reassure them that even if their pensions were terminated or frozen, they would still get almost the same payment from the PGBC. Only problem — that is not true if you are a pilot. Or a member of upper management. Why? The pension payouts for those two groups are higher — and the payouts would exceed the maximum levels allowed by the PBGC.

Brundage’s letter was issued, I believe, as a result of the airline’s failure to pay the roughly $100 million it was scheduled to pay into its pension plans last week. News of the airline’s minimal payment it did make was not received well with labor leaders of the airline’s employee groups. The move, coupled with the publicly vocal sparring between the airline and PBGC over the last several weeks succeeded in raising the angst level of employees considerably.

Brundage’s letter was followed by a missive to the troops from CEO Tom Horton. But all Horton’s note said was that the airline was going to make changes in its executive ranks, its management “layers” and that it was going to be the airline it used to be — again.

Again — no details.

Meanwhile, out in Phoenix, US Airways’ President Scott Kirby and his revenue management team are hard at work putting together a network restructuring plan for American Airlines. Or so said a report in Bloomberg last week.

Say what?

Let’s just say the obvious!

Of course US Airways’ President Scott Kirby has his minions working on a plan that will increase American’s revenue performance.

We may not get to hear the details until much later in the year — after American has had its chance to impress the bankruptcy court and the unsecured creditor’s committee with its restructuring plan. But I assure you — yes, US Airways is working on a proposal.

Oh my gosh. And this is just the start of this week’s issue.

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



PlaneBusiness Banter is Back!

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Hello everyone. It’s time once again to jump into the fray. Our Holiday Hiatus is over. Time to close out the story on 2011 and start the story of 2012.

The first issue of PlaneBusiness Banter for 2012 is now posted.

This week we talk a lot about airline stocks. We look at how they performed for the last week, the last month, the last quarter and the last year.

The good news? The sector posted a huge fourth quarter. Not so good news — yearly stock performance numbers were horrible. But hey, the quarterly numbers are much more important.

In addition, contrary to a number of wire service and financial news site headlined “end of year” airline stock stories that are floating about the Internet — we tell you which airline stock really posted the best return to investors in 2011.

And no, it’s not Alaska Air Group — as many stories say was the case.

We also update subscribers this week on the American Airlines bankruptcy. The airline is starting to announce route changes, and has announced some fleet news. But, as Deutsche Bank analyst Michael Linenberg reminded investors in a note last week, timing for the airline’s Section 1110 filing the end of this month means that we should hear a lot more from the airline in the next 2 1/2 weeks concerning which aircraft the airline wants to keep, which ones it wants to walk away from, and which ones it wants to renegotiate with lessors.

On the traffic front, December RASM estimates from those airlines that supply such things are coming in mixed. We tell you who has reported better than expected RASM performance, and who has disappointed.

Following up on traffic — a reminder. Airline earnings reports for the fourth quarter and year-end will begin to roll out in a little over a week.

Both JAL and Hong Kong Airlines are talking about potential IPOs in 2012, while Lufthansa was apparently just pulling Virgin Atlantic’s strings over bmi. The German airline finalized a deal with IAG, parent of British Airways for the airline, er, slots over the Christmas holiday. Not surprisingly Sir Richard says he is going to continue the fight to keep BA from getting its hands on bmi’s slots.

Unfortunately I don’t think his screams are going to matter to UK regulators.

On this side of the Atlantic, flight attendants for AirTran and Southwest announced a seniority agreement right before Christmas — good news for the airline.

Did Boeing meet its 2011 delivery goal? No.

How many more aircraft did Airbus deliver in 2011 than Boeing?

Are those “tiny” hairline cracks that have been found in the wing assembly of the A380s really a safety issue?

All of this, and a lot more in our first issue of the year.

If you aren’t yet a subscriber to PlaneBusiness Banter — why not? Find out how you can become one here.

PlaneBusiness Banter Now Posted!

home-typewriter copy 1.jpg Hello everyone! I hope all of you are not crazed today. It’s that time of year. It’s a good time. But it can also be very stressful. So try to concentrate, leave those cookies alone and get your work done so you can push all the papers aside later in the week and just breathe. And enjoy.

And eat chocolate.

This week’s two-for-one issue of PlaneBusiness Banter is now posted. I told subscribers last week that I was going to delay the publishing of our last issue for the year by a week — so that I could talk about my trip to New York last week.

But that was not the only reason to wait until this week to write.

Delta Air Lines took Manhattan last week. And Brooklyn. And Queens. And the Bronx. And Staten Island.

In addition to the airline’s new route announcements out of LaGuardia, the airline also held its investor conference in New York last week.

We let you know what the airline had to say.

Meanwhile, yours truly presented at the Business Travel News Group’s Corporate Travel Management 2012 Conference in New York last week along with Kevin Crissey, airline analyst for UBS.

It was a packed house and I’ll give you one piece of intel from our session. When surveyed, the group of top corporate buyers overwhelmingly said they see increased spending on air travel in 2012.

I also attended the BTN Travel Hall of Fame dinner later that evening. What a rollicking event that turned out to be, as some of the other inductees decided to turn it into a roast of former AMR Chairman and CEO Robert Crandall.

Meanwhile, while all of this was going on, airline stocks enjoyed a second week of strong gains. Big winners included JetBlue and US Airways.

But Pinnacle Airlines was not as lucky. The airline warned the week before last that it was attempting to restructure contracts with vendors, customers, and employee contracts.

The stock is now trading at about a buck.

It’s a jam-packed issue this week including our yearly column in which we divulge what airline CEOs are asking for from Santa, we look at the October DOT operational numbers, and much, much more.

Subscribers can access this week’s issue — the last issue for 2011– here!

PlaneBusiness Banter Now Posted!

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Hello everyone.

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

This week we have yet more third quarter earnings to discuss, as we take in-depth looks at the results posted by Allegiant, SkyWest and Pinnacle.

Next week, we wrap up our third quarter earnings call coverage as we look at Republic Holdings, Air Canada and WestJet.

Speaking of WestJet, our moles tell us that we should expect to hear another “important” announcement along with the airline’s third quarter numbers this week. That would make sense. It would also explain why the airline is late in reporting their numbers for the quarter.

Speaking of Republic — did you see what happened to shares of Republic Tuesday? That’s right. Shares picked up a whopping 61% on the day on incredibly heavy volume. The airline reported better than expected numbers and also gave clear guidance on how it plans to divest itself of Frontier Airlines. Investors liked what they heard. Obviously.

Late Tuesday there was an update posted on the AMR negotiations website concerning the negotiations between American and its pilots. This follows a week in which all indications continue to point to news of a new tentative agreement between American Airlines and its pilots being announced in the not-too-distant future.

Meanwhile, pilots at Southwest Airlines and AirTran overwhelmingly okayed their proposed seniority agreement. No surprise there.

Internationally, Singapore Airlines, IAG Group and Emirates all reported sharp declines in earnings for the quarter last week — as higher fuel prices took their toll.

Meanwhile, does IAG have a deal to buy bmi from Lufthansa or not? Depends on who you are asking. If you are asking Willie Walsh, the answer is yes. But if you are asking Richard Branson, the answer is apparently no.

Question of the week — How many weeks does it take to train new Boeing 787 pilots? Answer: Five weeks.

No, that’s not a joke. That’s what ANA is doing. Five weeks?

As usual, all of this, and much more — in this week’s issue of PlaneBusiness Banter.

PlaneBusiness Banter Now Posted!

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Hello everyone. This week in PlaneBusiness Banter we are talking earnings. And more earnings. And more earnings.

This week’s 150-plus page issue contains our earnings call reviews for American Airlines, Hawaiian Airlines, Alaska Air Group and Southwest Airlines.

To sum up? We now know American has no more unencumbered aircraft (all the furniture has now, officially, been burned), one analyst believes the company is pushing pilots to agree to an expanded domestic codesharing agreement so that American can enter into such an agreement with US Airways, and yet another analyst thinks the airline’s liquidity situation is inevitably going to lead to a bankruptcy filing — probably in 2012.

Meanwhile, American Eagle and its pilots came to terms on a new eight-year tentative agreement last week.

Southwest Airlines‘ earnings call was …long. The airline’s financial results are…confusing. They are going to be that way for probably another couple of quarters — until the merger with AirTran passes the year-over-year comp mark. Meanwhile the airline’s costs are higher than we’d like to see but revenues were good.

Many of you still appear to be confused as to whether the airline lost money or made money. We explain all of that, and we give you CFO Laura Wright’s dissertation on the airline’s hedge situation. In full.

Laura deserves a medal for that performance.

Alaska Air Group had another strong quarter. The airline now does appear to be that very rare breed. Quarter in, quarter out, the airline continues to produce exceptional margins while running a very well managed operation.

Pinch me. Is this company really operating an airline?

Hawaiian Airlines also had a very good third quarter. The airline has taken a number of risks over the last couple of years, in an attempt to diversify its flying mix. This quarter’s results prove the airline’s strategic plan is working.

A heads up for institutional investors — management members from both Alaska Air Group and Hawaiian Airlines will be in New York in November for investor days. I’d recommend you go and talk to the teams from both airlines.

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

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PlaneBusiness Banter Now Posted!

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Let’s try this again. It seems that our blog editor chose to eat my earlier post this evening. You guys know the drill. This week’s issue of PlaneBusiness Banter is now posted.

This week we talk a lot about American Airlines. Again. We also talk about the craziness going on in Europe where it truly is “Let’s Make a Deal” season. Aer Lingus, British Airways, Etihad, Virgin Atlantic, bmi. It’s a mad, mad, mad world out there.

Airline stocks had a great week last week — and one stock in particular shone the brightest. That stock was Spirit Airlines. The airline announced killer traffic numbers last week and shares took off in the low fare carrier as a result.

JetBlue announced its CFO, Ed Barnes, had resigned, effective immediately, after the close of trading Tuesday. We never like to hear that a CFO has resigned, effective immediately. In addition, given the timing of the news, just one week before the airline announces third quarter earnings, you have to believe this was a board of directors decision.

The DOT reported its August Airline Consumer Travel Report last week. We dissect the numbers and let you know who had a good month and who didn’t. Hint: JetBlue had an awful month — the result of the August storms that raked the East Coast. But US Airways and Continental Airlines both saw their performances slip for the month as well.

Of course the big news this week is earnings. Hawaiian Airlines kicked off the third quarter earnings season Tuesday with better than expected numbers, and Wednesday, American Airlines will report its third quarter loss. As has been the case for more quarters than we can remember, American should be the only major U.S. airline to post a loss for the quarter.

Thursday we hear the profit news from Alaska Air Group and Southwest Airlines.

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

Today’s Market Sell-Off of Airline Sector

A couple of observations on today’s black day for airline stocks.

One, the markets are in panic mode in general today — as fears of a continued economic slowdown shake the Street. This is not just an airline sector sell-off, it’s a general market fear-driven sell-off fueled by continuing concerns over the situation in Europe.

Two, the general market assumption is that if the economy goes south, so will airline revenues.

Three, in the case of AMR, the situation is particularly acute, because investors know the airline has lagged in revenue performance, and the airline is the most cash restrained of all the major airlines.

Four, fears of an impending AMR bankruptcy have been rumbling around and picking up traction for the last 30-45 days. Increasing numbers of retiring pilots do not help the situation, nor do continued analyst concerns over the airline’s long-term liquidity health.

Looking at the latest sector numbers for today, it looks as if shares of other airline stocks that were hammered earlier in the day into double-digit declines have bounced back a bit, while the volume of AMR shares traded continues to boggle the mind. Shares of AMR have climbed back a little bit since trading was resumed. Now shares are only down 30%, trading at around 2.07. Earlier in the day shares were down to 1.75.

Not 35%.

The current trend is up, not down.