Tag Archives: wall street

PlaneBusiness Banter Now Posted!

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Hello all.

Here’s hoping that all of you had a wonderful Turkey Week. I did. Although I didn’t end up with enough left-over turkey. I may have to roast another one here shortly, just so I can have leftovers to make turkey hash with.

This post-Turkey Week issue we talk about a lot of things. First, our column this week looks at Orbitz and how it got to where it is today — and why American Airlines is trying to pull its inventory from its website. I take a look at the history of the company — and how it has evolved from its humble beginnings. Ahem. You all remember those beginnings. The company was set up as the “Travelocity Terminator” — the first attempt to set up a “direct connect” OTA for the airlines that created it.

My how things change.

Of course we talk about the as-yet-to-be-announced delay for the Boeing 787, the update from Qantas on its A380 operations, and yes, we even talk about how Air France is going to once again undertake recovery operations to find the black boxes and anything else it can find from its lost Airbus in the Atlantic Ocean this coming spring.

Union talk? Of course. We follow up our issue last week with a great letter to the editor from one of our subscribers in which he touches on both the Continental/united scope “problem” and the flight attendant situation at American Airlines. In a very astute manner I might add.

Airline stocks? This week we talk about the latest from Morgan Stanley analyst Bill Greene. Mr. Greene happens to believe that there is opportunity in them there shares. Airline shares that is. Right now.

Virgin America lands in Dallas this week. Yee haw! In anticipation of Virgin’s arrival, American is offering their customers the usual heavy dose of frequent flier points on DFW flights to LA and SFO, but as I talk about this week — is this tired and true tactic still relevant?

I’m not sure. At least not in this case. The Virgin product is a nice one. And there are a whole lot of folks for whom accumulating more AAdvantage miles is not nearly as important as a nice comfy seat, cool onboard entertainment and food options, and well….that whole Virgin Vibe thing.

Oh, we talk about a lot more this week — but I need to get this posted.

Subscribers can access this week’s issue here! Now!

Airline Stocks Ride the Wall Street Rollercoaster; Another Volatile Friday

What a week.

We had a slew of airlines report earnings this week — including Allegiant — which posted a stunning revenue performance for the third quarter.

And — everyone else. Who all reported losses to one degree or another. This group included United Airlines, US Airways, Alaska Air Group, AirTran, and JetBlue.

By now you are all probably cognizant of how the markets opened this morning. There was a huge sell off in the Asian markets overnight – and the futures markets were showing such precipitous declines that the NYSE decided to put in curbs before the market even opened in New York this morning.

However, after another rock and roll day, the Dow Jones Industrials closed down only 215.05 points to 8476.20, after having been down as much as 500 points at the opening bell.

Just another fun Friday on Wall Street.

And frankly, these fun Fridays are not going to go away until the Feds begin to address the housing problem.

What? Aren’t they doing that with all that bailout money you and I are now on the hook for? No.

In fact, theoriginal thinking behind the $700 billion plus bailout idea, along with all the moves the Fed has made to increase the willingness of banks to lend money to one another — was that these moves would buy the markets time. Time to sort out the housing debacle.

The root cause of this mess — a housing market that grew out of control on inflated home prices, low interest rates, and greedy banking institutions has yet, however, to really be addressed.

Oh, and yes, I’m sure you also heard yesterday that the number of foreclosures was up 70% in September, year-over-year.

So, to put all the current mess in perspective — the root cause of all of it is still just ….sitting out there.

As for the airlines, it was another bittersweet day.

Bittersweet because the price of oil continues to drop like a rock. Today the price of crude dropped 3.69 to end the day at 64.15. This is the lowest price in 17 months. Meanwhile, N.Y. Harbor Jet Fuel closed the day at $2.08/gallon, down 10 cents on the day.

On the other hand, the vast majority of airline stocks were stung badly today. The reason? The rest of the economic news is so bad.

One of the few airline stocks to post a nice gain today was US Airways. The stocks was up almost 20% on the day at one point, but it drifted back as the day went on. The stock closed up 12% to 7.97. I think analyst comments concerning the airline’s increased liquidity — which the airline disclosed yesterday when it reported earnings — was the key to this uptick.

Wall Street Makes History, Airline Stocks React Erratically, Oil Drops Significantly

It’s official.

The Dow Jones Industrial Average posted its worst week in history this week.

The average had its worst week on record in both point and percentage terms, as did the Standard & Poor’s 500 index.

The Dow Jones Industrial Average, after starting the day down more than 700 points, finished down only 128 points, but it was one wild road in between.

Over the last eight days, the Dow has lost just under 2400 points.

As for airline stocks, it was also a volatile mix today as several airlines stocks posted record-breaking one-day gains. But we had some losers in the bunch as well.

On the huge plus side for the day, shares of Republic Holdings picked up a whopping 29% today. Yes, you read that correctly. Shares here closed at 8.94.

But wait — we had one airline stock do even better. Shares of Alaska Air Group shot up 31% on the day, closing at 18.80.

Shares of US Airways also had a great day, as shares here were up 27%, closing at 4.60.

AMR, parent of American Airlines saw their shares pick up 20%, closing at 8 bucks even.

AirTran also had a good day, as shares here picked up a nice 18%, closing at 1.96.

Shares of SkyWest didn’t have a bad day either, as shares here shot up 17%, closing at 13.75.

On the loser side, we really just had a small handful of notable drops for the day.

Shares of Pinnacle were down 10%, closing at 2.37, while shares of Mesa dropped back 15%, closing at 25 cents.

Embraer and Bombardier didn’t have good days either — not surprising considering the action in the market as a whole. Embraer shares closed down 8%, ending the week at 17.20, while shares of Bombardier closed down 16%, ending the week at 3.50.

And, last, but by no means least — where did crude and jet fuel end up today?

Crude futures closed at 77.70, down 8.89 on the day, while the average spot price for jet fuel closed at 2.33, down 21 cents on the day.

Taken by itself, this would be great news for the things with wings.

Unfortunately, there is that elephant that is blocking the view to the nice new HD flatscreen — the rest of the financial/economic mess on a worldwide basis and the recognition, finally, that no, this is not just a little “subprime” mortgage problem centered in California, Arizona and Florida.

View from the Ledge: A Reader Reports on the Closing Bell While Enjoying the President’s Club

“Hi Holly, Its 2:05pm on Friday MDT, 4:05 pm EDT. I am sitting in the President’s Club waiting for a delayed LH. The delay allowed me to witness a spectacle. At about 1:59 people started getting up and gravitating towards the TV screen by the bar. It wasn’t a scandal, it wasn’t an assasination, it was the closing bell in New York. The bell rang at 2pm local and half the room walked over to see the news (flat). You’d think the Superbowl was on though people’s faces weren’t quite that excited.

Thought it worth noting to you given your comments on PlaneBuzz.

Interesting times.

Try and have a good weekend.”

Wall Street Sends Politicians a Message: We Run This Hood

In case you’ve been occupied with feeding the cat, doing Sudoku, or eating a late lunch, the world financial markets are one big mess today.

So much for the power of politicians in Washington to snap their fingers and hope that the rest of the world simply agrees to sit back and let Treasury Secretary Hank Paulson do his “magic.” A couple of problems with that $700 billion gift from the U.S. taxpayers that Congress okayed last week. One, it’s going to take weeks before any of that buy-back of crappy debt even begins. Two, credit markets are frozen NOW. Third, now world markets are starting to unravel.

Which brings us to the big news if you are an airline investor, or someone who simply owns shares of your own airline that you work for.

Not only are world financial markets one big mess today — but airlines stocks are getting hit very hard.

You’d think that with the price of oil now down below $90 today that investors would be snapping up airline shares right and left.

After all — think of the potentially lethal profit cocktail we have going on — sharply lower fuel costs on their way, coupled with sharply reduced capacity. It would seem like the perfect recipe for higher airline stock prices.

Unfortunately that is not how the market is thinking today. Then again, the market is not thinking very clearly about much of anything. This is definitely one of those days when fear rules.

As for the airline sector, the biggest decliners as of this posting include: United, which is down 18% at 6.68, Continental Airlines, down 20% to 12.15, Republic Holdings down 16% to 7.86, AMR, parent of American Airlines, down 18% to 7.65, and US Airways, down 14% to 5.58.

We’re Getting on a Plane and the Economy is Going Down the Tubes

Black Monday Recalled

Good morning from the Louis Armstrong International Airport. Yes, for you without GPS capability, that means I’m in New Orleans. I’m leaving this morning for Dallas, where I will attend the Southwest Airlines’ Media event Tuesday and Wednesday.

I’m sitting here looking out the window at the US Airways Piedmont retro livery. What a cool airplane. Then again I’m a sucker for most any retro paint job.

Actually, I’m looking at the Piedmont livery in-between reading about the meltdown in the financial markets, both here and overseas.

All jokes aside (re: the Origami Bank folded overnight) it’s not good out there folks. As the ex-CEO of Salomon Brothers, John Gutfreund, said this morning on CNBC, the problem is — nobody knows what the hell is going on or how bad things really are. Either here or in Europe. Much less Asia.

My personal take is that John is exactly right.

The FDIC announced a deal this morning between Citi and Wachovia. I was not able to hear just what Citi is taking over and what it is not. But it sounds very similar to the WaMu deal last week.

While they are both being cloaked as having been “absorbed” or “taken over” by other banks — the truth is that both banks failed. Period.

And I doubt they are going to be the last.

Meanwhile on the other side of the pond, Belgian-Dutch banking and insurance group Fortis was propped up as the governments of Belgium, the Netherlands and Luxembourg took a 49% interest in the financial, banking and insurance group, in return for an injection of $16.4 billion.

But that’s not all.

The U.K. Treasury said Monday it took control of Bradford and Bingley and will transfer the midsized mortgage lender’s retail deposits business and branch network to Abbey National. B&B is a major provider of mortgages in the U.K.

Meanwhile back on this side of the pond, the Federal Reserve announced a massive injection of liquidity — a deal that involves the central banks of a number of European countries

I’m not sure I want to see what’s going on when I get off the plane at Love Field.

Hang in there folks. It’s going to be a very rough day on Wall Street.