Tag Archives: Hawaiian Airlines

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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Good evening everyone.

This week’s issue of PlaneBusiness Banter is now posted. And a jam-packed issue it is.

This week we’re talking all things American Airlines (of course), we give you a look at the presentations last week at the Raymond James Global Airline Conference in New York, and of course, we have fourth quarter earnings reports from two airlines to dissect. Both Hawaiian Holdings, parent of Hawaiian Airlines, and Allegiant Travel Company reported earnings last week.

While we have been big fans of the Hawaiian Airlines story over the last several years, and particularly the last year, why is it that I was not that impressed with the airline’s earnings call? A hint: It has a lot to do with what is on the airline’s plate in 2012. Both in terms of revenues and costs.

As for Allegiant, the fourth quarter numbers were good, but the airline continues in the midst of its own transformation plan with seats being added to its aircraft and the carrier’s move into the Hawaiian-West Coast market still yet to launch.

Meanwhile, it was another great week for airline stocks on Wall Street. We tell you who posted double-digit gains for yet another week. (And a good number of airline stocks did just that.)

On the IT front, sources tell us that the HP “JetStream” PSS Extreme Makeover project at American Airlines is done. Not as in “It’s completed.” More like, “It’s done.” Toast.

We hear the project has finally been shelved — after the airline had spent tens of millions of dollars on it with little to show for its investment. In the airline’s bankruptcy filing, the airline said it owed HP some $30 million or so. In fact, HP has a seat on the airline’s unsecured creditors committee. The project was first announced in 2009.

Should be quite interesting to see what the airline does now. Will it crawl back to Sabre and try to work out some type of add-on to its existing Sabre system? Or will this give yet another vendor a chance to wriggle their toes in the door?

Meanwhile, up in New York last week Raymond James held its Global Airline Investor Conference. We’ll give you a peek at some of the presentations that were made by some of the usual suspects.

Malev shuts down, Ryanair moves in, and Singapore Airlines posts a 53% drop in fiscal third quarter earnings — all of this and much, much, more in this week’s jam-packed edition of PlaneBusiness Banter.

PlaneBusiness Banter is Now Posted!

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Good evening everyone. It’s time once again for this week’s issue of PlaneBusiness Banter. Or rather, this week’s “Turkey Trot” edition of PBB.

Yours truly got hit by a nasty upper respiratory infection this last weekend, so I have to tell you — the “Turkey Trot” edition almost didn’t make it to the table.

But I couldn’t have all our subscribers venturing out over the river and through the woods without some good reading material.

This week we’re talking about a hodge-podge of things — lunatic legislation introduced just in time for Thanksgiving travelers that seeks to either prevent airlines from charging for fees, or then taxing airlines more that do charge for fees; a USB investment research report that pretty much calls the EU’s Emissions Trading Scheme worthless; American Airlines’ withering market cap; American Airline’s withered state in general; SkyWest’s new flying for US Airways; Travelport and American’s latest court news; one analyst’s take on the latest Southwest Airlines‘ schedule uploads for 2Q2012, and what these changes mean for competitors; Hawaiian Airlines’ decision to take Manhattan; the DOT’s September Airline Consumer Travel Report; and oh, a whole lot more.

Subscribers can access this week’s issue here.

PlaneBusiness Banter Now Posted!

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Hello to everyone on what is a dark and stormy night here in the DFW Metroplex. This week’s mega-earnings issue of PlaneBusiness Banter is now posted. Be prepared. It’s another long one.

This week we take an in-depth look at the recent third quarter earnings from JetBlue, Hawaiian, Allegiant, and Alaska Air Group.

All in all, a very impressive group of industry representatives.

If you are looking for an airline that is doing its best to run itself like a real honest-to-god profitable investment for its shareholders, look no further than Alaska Air Group, which is now poised to hit its 10% ROIC target for the year.

Not only that but the airline posted an exceptional operating margin for the quarter.

I can’t say enough good things about the management team at Alaska. They have done one heck of a job over the last five years at the airline.

Hawaiian Airlines also had a very good quarter, although the airline continued to see fierce price competition on its trans-Pacific routes. I like the airline’s continued expansion into Asia as a good hedge against the continuing trans-Pacific warfare.

JetBlue posted good numbers as well, and that ROIC metric was thrown around in their call as well. The airline has postponed some aircraft deliveries, it continues to work through its migration to the Sabre reservation system, and overall the numbers for the quarter were good.

Allegiant came in a bit above the analyst consensus numbers that were in place in mid-October, but the air travel company that also happens to run Allegiant Air didn’t quite come in as high as had been previously modeled by most analysts. So — their results were a bit of a good news, “okay” news situation. In terms of the stock — the news was good enough to create a short squeeze on shares of the airline’s stock though. Going into October the airline was the most heavily shorted of all the airline stocks.

This last week yours truly was at Southwest Airlines for their Media Day event. I talk a lot about that in this week’s issue as well. Yes, the rumor is true. The airline had all us media types board an aircraft outside its hangar at the airline’s headquarters — to show us how fast its Row 44 Wi-Fi product is — and it wouldn’t work. We couldn’t connect.

I felt sorry for them. We’ve all been there, right?

Lots more about what we heard and saw over on Denton Drive in this week’s issue.

Also — the hot topic that is filling up our email bag this week are the various heated communications that are coming from almost every pilot union or pilot MEC group that we know of. The subject? The new “enhanced” security measures that the TSA just rolled out this week that includes the “body scanners” in addition to pat downs that we have heard from various people go way beyond what most people are comfortable with.

I fly to Los Angeles on Wednesday. I always get nabbed for secondary screening anyway because of this hunk of titanium that is in my leg. I am not going to be happy if now, I am subjected to a more “enhanced” pat down every time I fly as a result.

Anyway, we talk about all that as well.

We’ve got all kinds of other stuff too in what I figure is easily another 100 plus page issue this week.

Subscribers can access this week’s issue here.

PlaneBusiness Banter Now Posted

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

It was a busy week for the Things With Wings last week.

First, American Airlines reported its second quarter earnings results. The airline lost a lot of money. $390 million to be exact. $319 million excluding special items. However, you’d never have known it if you listened to the airline’s earnings call — which seemed focused on one thing — liquidity. Oh, and capacity reductions. That’s fine, but there are other aspects of an airline’s operations I’d like to hear about.

Then we had the blockbuster news concerning Continental’s Chairman and CEO, Larry Kellner. As I write in this week’s PBB, even though the management backbench strength at Continental Airlines is strong, and the airline should be able to carry on just fine as Larry goes to seek his fortune in the equity investment game — it’s quite discouraging to see one of the industry’s best and brightest leave.

Following up on our piece in last week’s issue about United’s bone-headed (or would that be heavy-handed) attempts to get travel agencies to take on more financial risk — or rather some travel agencies — the airline said late last week that it is going to give agencies 60 days to implement the business operation changes it seeks.

This whole thing still reeks. Nothing the airline says rings true.

Southwest Airlines had its own place in the spotlight last week, or would that be the sunlight, as the airline had a 737-300 aircraft develop a hole in the roof while enroute from Nashville to BWI. Not what the airline wants or needs — especially considering the issues the airline has had with the FAA concerning fuselage checks in the past. Preliminary NTSB report says there was no evidence of previous corrosion at the site.

That was not the only bad news Southwest had last week. The airline was also notified that its debt rating with Moody’s is under review, signaling a potential downgrade.

The Senate produced its version of an FAA Reauthorization bill last week. How did it differ from the House version? It differed on quite a few items. We talk more about that in this week’s issue.

Those misguided folks at the US Airways Pilot Association, the pilot union that was created in an attempt to circumvent the original ALPA seniority award that was handed down after US Airways and America West combined forces — had their head handed to them on a plate by U.S. District Judge Neil Wake last week. Wake issued his final injunctive order on the case brought against USAPA by the former America West pilots. Yes, we talk about this too.

Oh, and speaking of USAPA, we also give them, and our readers, a handy step-by-step instruction of how you correctly determine just how much an airline executive makes, using SEC documentation. Apparently the folks at USAPA have a problem figuring these things out.

British Airways raids its guaranteed employee pension benefit larder, Air Canada gets all of its employees “on board” with its 21-month contract extension program, and 215 Delta pilots sign up for the airline’s sweetened “early-out” package. Somehow I think the guys in suits over in Atlanta had hoped that number had been higher.

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

If you are a subscriber, you can access this week’s issue here. If not, you can learn how you can become a subscriber by clicking here.

Judge Strikes Down Mesa Air Group/Yucaipa Deal To Use “Aloha Airlines” Name

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Thursday Federal U.S. Bankruptcy Judge Lloyd King disqualified Mesa Air Group as a co-bidder for the right to use the “Aloha Airlines” corporate identity.

You may recall that Ron Burkle’s Yucaipa Co., Aloha’s largest creditor, had put together a cozy little deal with Mesa Air Group last last year that would have seen Burkle drop the antitrust lawsuit that Aloha had filed against Mesa Air Group in which Aloha alleged that Mesa had attempted to drive Aloha out of business by starting up its lowfare carrier “go!” in Hawaii. In return, Mesa had agreed to enter into a “licensing” agreement in which it would pay Yucaipa for the right to use the “Aloha” name and brand.

There was just one little hitch to this deal.

It had to be approved by the bankruptcy judge handling the Aloha bankruptcy.

And here is where the plan came unglued.

In December, after Yucaipa bid the highest amount for the use of the “Aloha” name as part of the airline’s bankruptcy proceedings, (over Hawaiian Airline’s competing bid), Judge King blocked the deal as he questioned the motives behind the move by both airlines.

“How about all the people whose lives were devastated in this case?” asked King, noting that Mesa and go! were largely blamed for Aloha’s demise. “Doesn’t that count? Is it just the money?”

At that time, King postponed a hearing that would have given the okay to the proposed licensing pact, and instead set a new date of Feb. 19 — so that opponents and supporters of the deal would have more time to respond.

In March, Judge King threw out the sale of the Aloha Airlines name and other intellectual property to Mesa.

Judge King, emphasizing that the auction to buy Aloha’s intellectual property should have been a public process, blasted the attorneys conducting the auction for refusing to allow Honolulu Advertiser reporter Rick Daysog into the proceedings. Daysog wrote a letter to the court voicing his complaint about his being excluded from the proceedings. King ruled that the auction must be reheld.

Which brings us to Thursday.

According to a report in the Star-Bulletin dated May 15, King said he was denying a renewed motion by Aloha’s Chapter 7 trustee, Dane Field, to conduct an auction for Aloha’s intellectual property rights because Yucaipa had a deal to license the Aloha name to go! for 10 years.

“Standing alone, with no connections to Mesa and appropriate assurance that no interest in the Aloha IP would ever pass to Mesa, there is no apparent cause to deny Yucaipa the ability to credit bid,” King wrote.

However, he said that since the trustee’s motion and the asset purchase agreement do not identify Mesa as a co-purchaser or even mention the license of the intellectual property which Yucaipa is obligated to give to Mesa, “cause exists to deny the credit bid.”

“This court has an independent power and duty to examine the propriety of a proposed sale of property of a bankruptcy estate, and it cannot allow its authority to be misused in a way that would reward Mesa for its misconduct,” King said.

Kudos To Hawaiian Advertiser Reporter Rick Daysog; Sale of Aloha Name Thrown Out

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A shout out to Hawaiian Advertiser reporter Rick Daysog today.

Because of Rick, the “behind closed doors” bankruptcy agreement that saw Yucaipa Companies be granted the intellectual property rights to Aloha Airlines, including the airline’s name, was thrown out by U.S. Bankruptcy Judge Lloyd King this week.

You may recall that we talked about this questionable deal back in November and December. The deal would have resulted in Mesa Air Group taking over the Aloha Airlines name — because Yucaipa had already struck a deal to license the name to Mesa. Yucaipa was the largest shareholder in Aloha.

King ruled that the auction must be reheld.

Mesa apparently wants to obtain the name, and rebrand its regional Hawaiian airline go! — with the Aloha name. A fact that has not gone over very well with a lot of people in Hawaii, including former employees of Aloha, and, apparently, Judge King, who blasted the proposed deal with Mesa in the first hearing held on the deal in December, where King postponed approving the auction the first time. Many in Hawaii blame Mesa for Aloha’s demise.

Kudos to Rick. Keep up the good work and keep working to keep those deals out in the open.

Bleak Cold Day on Wall Street

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Yikes. It wasn’t the bad weather up and down the East Coast today that made investors shiver.

The folks on Wall Street did a find job of doing that on their own.

And not just for airline stocks.

When all the shouting was over, the Dow Jones Industrials ended the day down 299.64 points, or 4.2%. This brought the Dow down to 6763.29. This was the first time the Dow has closed below 7000 since May 1, 1997.

Meanwhile, the S&P 500 fell 4.7% or 34.27 points, while the Nasdaq lost 4% or 54.99 points, closing at 1322.85.

The big news pushing stocks lower today concerned insurance giant AIG. The federal government announced that it was increasing its stake in the company by some $30 billion. The total for both U.S. Treasury and Federal Reserve investments in the cratering financial giant is now about $163 billion.

The market was in no mood to hear this today, and stocks took the brunt of investors angst as a result.

In the airline sector, the carnage was deep, and it ran pretty much across the board.

Of all the stocks we track at PlaneBusiness, none, not one, was up for the day.

The biggest losers for the day included: AirTran, which lost 15%, closing at 2.54; Hawaiian Airlines, which also dropped back 15% to close at 2.68; US Airways which lost 13%, closing at 2.47; JetBlue, which was down 14% to close at 3.29; Pinnacle, which lost a whopping 20%, closing at 1.12; ExpressJet, which was down 10%, closing at 1.22; and United Airlines, which lost 13% to close at 4.26.

Whew.

That’s all I can say.

Oh, and Southwest shares, which are plumbing unbefore seen depths of late, closed at 5.52, down 6% for the day.

Airline Stock Winners for 2008: Allegiant (ALGT) Gets Top Performance Nod

When all was said and done, and the crystal ball descended in Times Square Wednesday night — I know that you were, just as I was, chomping at the bit to know the answer to one burning question.

Which airline stock was the top performer in 2008?

Against all odds, including floods, snow, sleet, testy employees and the darkness of oil (prices), which airline stock still managed to shine brightly against the setting sun of demand?

I am very happy to report that the airline stock that posted the highest return to shareholders in 2008 was one of our favorite airline stocks here at PlaneBusiness.

That stock was — Allegiant Travel Company. The company is the parent of Allegiant Airlines.

The airline, which managed to continue to post profits in 2008 — even though it was flying fuel-guzzling MD-80s, saw its shares climb a whopping 51% for the year, ending 2008 at 48.57 a share.

Not surprisingly, this year was one of the worst on record in terms of yearly gains and losses for the things with wings, collectively speaking.

Of all the airline and airline-related stocks we track, only four managed to post a gain for the year.

Those four were:

Allegiant 51%

Hawaiian Airlines 25%

JetBlue 20.3%

Alaska Air Group 17%

*Alaska and JetBlue are also two PlaneBusiness favorite stocks.

To see how your favorite (or not-so-favorite) airline stock performed in 2008, click here.