jump to navigation

US Airways Posts Loss April 29, 2005

Posted by Andrew in Uncategorized.
1 comment so far

April 29- Today US Airways joined a burgeoning group of legacy airlines posting heavy first quarter losses. Echoing the industry-wide mantra, “high fuel-costs”, US Airways blamed its $191 million loss on exceedingly expensive jet-fuel and weak revenue. Even though the airline cut “its personnel costs by 26 percent, or $164 million, from $641 million in the year-ago quarter to $477 million”, the airline still sustained heavy losses. US Airways attributes its flagging revenue to intense competition with Southwest Airlines. Revenue is likely to continue to fall, as Southwest gears up to invade another one of US Airway’s hubs, Pittsburgh. US Airways chief executive Bruce Lakefield was quoted as saying that “We find ourselves in the same situation as most of the industry, where fuel costs cannot be fully recovered through traffic growth and incremental fare increases.” While high fuel costs may be indicative of the current plight of the industry, US Airways needs to reverse its fortunes as it readies to attempt a merger with America West Airlines.

Advertisements

Airbus A380 Editorial April 29, 2005

Posted by Andrew in Uncategorized.
add a comment


(Photo: French Frogs AirSlides)
Aeroposte plans to post an editorial within the next few days on the role that the Airbus A380 will play in the airline industry.

Air Canada Defects to Boeing April 25, 2005

Posted by Andrew in Uncategorized.
add a comment

(Photo: Aircanada.com)

In a momentum swinging turn of events, Air Canada announced today that Boeing would be the exclusive provider of aircraft for the renewal of its long-haul fleet. The agreement, which totals $6 billion dollars, includes a mixed order of eight Boeing 777’s and fourteen 787’s. Air Canada also has the option of purchasing up to 64 more 777’s and 787’s. This latest order is the most harsh blow to the Airbus A350 program, which has yet to garner an order from a major carrier. According to several sources, Air Canada entertained purchasing A350’s; however, management decided that the 787 was a superior aircraft that could be delivered at an earlier date. These aircraft will largely be utilized on European and Asian markets, and likely will bring in an additional “$300 million of improved annual profitability by 2010.”

Jetblue Impresses Wall Street Even Though Its Profit Drops April 21, 2005

Posted by Andrew in Uncategorized.
add a comment

All too often, companies try to please Wall Street by inflating their financial information. Ironically, Jetblue Air’s profit dropped for the first quarter, but stock investors were jubilant that the airline was able to make a profit at all. While the rest of the industry collectively loses billions of dollars, Jetblue and a select few airlines have developed a formula that leads to consistent profitability. Shares of Jetblue stock rose $1.28 on the news that Jetblue earned $ 7 million in income for the first quarter. According to the press release, “last quarter, JetBlue expanded its total capacity by 22.5 percent, and planes were 85.8 percent full compared with 79.9 percent occupancy the year before. However, the amount JetBlue earned for each passenger mile, or yield, declined 2.7 percent to 8.07 cents.” Jetblue executives cite fuel costs as the major factor that lead to lower profits. The Associated Press reported that “JetBlue spent $86.6 million on aircraft fuel last quarter, an increase of 76 percent from $49.2 million spent a year ago. The average fuel cost swelled 42.6 percent to $1.31 per gallon, JetBlue said.” Wall Street is likely to be bullish on Jetblue stock for the forseable future. Jetblue is expanding at a voracious rate, all the while maintaining profitablity without significant fuel hedging. The airline will begin receiving delivery of 100 seat Embraer 190 jets, which will allow Jetblue to enter markets not viable with its Airbus A320 aircraft.

Southwest Attains Huge Profits April 16, 2005

Posted by Andrew in Uncategorized.
add a comment

Southwest Airlines, frequently cited as one of the most fiscally responsible companies ever, reported a profit of $76 million for the first three months of 2005. Southwest tripled its earnings when compared to precisely a year ago. The no-frills carrier even managed to exceed the expectations of a generally bullish Wall Street. According to a press release, the airline has “insulated itself from rising oil costs by hedging, taking options to buy most of its jet fuel in advance at lower prices.” Due to its healthy financial position, Southwest was able to hedge its fuel at $26 a barrel, roughly half the price most carriers are forced to pay today. All in all, the fuel savings for the first quarter were $155 million, nearly twice the carrier’s first quarter profit. Even so, Southwest warns that it will probably need to increase fares by $2 to $6 round trip to offset the rising cost of their hedged fuel, which will increase to $32 a barrel in 2006. In addition, the airline will continue to spend more on fuel, as its adds 29 Boeing 737 aircraft to its fleet.

Northwest Nears Completion of 787 Deal with Boeing April 12, 2005

Posted by Andrew in Uncategorized.
add a comment

Editor note: I wrote a fairly detailed article about the imminent Northwest Boeing 787 purchase. Blogger, the service that powers this website, crashed and lost the article. Due to imminent deadlines, I can’t reproduce the article; however I will provide my sources so that my work was not completely in vain.

Marketwatch article: http://http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7BD17D1D5C%2DF698%2D4E69%2DB2B9%2D029A1B5AC842%7D

Current and lively discussion of the Northwest 787 Purchase: http://www.airliners.net/discussions/general_aviation/read.main/2047951/

Independence Air Reports Highest Load Factor Ever April 5, 2005

Posted by Andrew in Uncategorized.
add a comment

Washington D.C based low-fare carrier Independence Air reported its highest ever monthly load factor today: 70.7%. Airlines determine load factor by dividing the number of seats sold by the total amount of seats available. According to the press release: “The airline generated 255.9 million revenue passenger miles (RPMs), while available seat miles (ASMs) were 361.9 million. Independence Air load factor for March was 70.7 percent — the highest since the airline began service last year. For the month, 515,611 passengers were carried.” Although the load factor is well below that of the industry standard, and even further below that of low-cost carriers Jetblue and Southwest, Chairman and Chief Executive Kerry Skeen was quoted as saying that “nine months since the launch of Independence Air, we have achieved our first monthly load factor above 70%, which is a testament to the overwhelmingly positive reaction we’re receiving from our customers, as well as the dedication and enthusiasm of our employees.” Although this latest announcement is a positive step for the airline, it is the result of a tremendous cut in capacity and staff at Independence Air. While the financial health may be improving, it remains to be seen if the airline will be able to continue to recover from the emotional toll that personnel furloughs are exacting on the morale of the staff at Flyi.

Airlines Try to Tack on $10 to Domestic Fares April 2, 2005

Posted by Andrew in Uncategorized.
add a comment

For the fourth time this month, the major legacy carriers are seeking to boost round trip tickets by ten dollars for domestic flights. Citing high jet fuel prices, the airlines believe that it is necessary to cover their additional costs with a surcharge. This tactic only succeeds if all the legacy airlines adopt this policy; if one airline chooses not to comply, the other airlines are forced to revert to drop the fare hike. According to the press release, “Delta Air Lines Inc. and UAL Corp.’s United Airlines led the way with increases of $10 per round trip Thursday night, and US Airways Group Inc., Northwest Airlines Corp., AMR Corp.’s American Airlines and America West Airlines matched the higher fares Friday.” Low fare carriers Jetblue and Southwest did not match the latest price increase.