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Jetblue Shares Rise on News of Song Cutbacks February 25, 2006

Posted by Andrew in Uncategorized.
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Jetblue Airways shares rose six percent on the news that Delta Airlines plans to further cutback the number of flights between New York to Florida. Jetblue competes heavily with Delta low-fare subsidiary Song on these routes. Delta attributed the reduction in frequency of flights to “a seasonal pull down in capacity for May, which is one of the lowest demand periods to Florida.” Some analysts belief the changes will be permanent, as Delta prepares to shutdown Song and fold its aircraft back into the mainline Delta fleet. Despite Delta’s statement that the changes would only be temporary, brokerage JP Morgan upgraded Jetblue’s rating from “underweight” to “neutral.” In addition to the cuts in Florida, Delta plans to slightly reduce the number of flights to Los Angeles and Seattle. Delta spokesman John Kennedy said these changes were “partly due to the airline integrating Song into its network and adding first-class seats to its flights.” Even so, with less competition on its bread and butter New York to Florida flights, Jetblue Airways expects the move to boost the carrier’s financial fortunes.

International Coalition Investigates Cargo Price-Fixing February 15, 2006

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Investigators acting on behalf of the American government and the European Union conducted a series of raids on more than twelve airlines yesterday. Although spokespersons for the European Commision and the US Department of Justice refused to provide details about the probe, reports of the investigation have emerged through formal press releases sent out by the targeted airlines. It is believed that the joint coalition is trying to determine whether “there has been collusion in the air cargo industry to fix prices on surcharges for fuel, security and insurance.” The investigation has targeted the cargo divisions of several high-profile air carriers, including American Airlines and Air France. A host of other airlines are being investigated, including United Airlines, UPS, SAS Airlines, Atlas Air Worldwide Holding Inc.’s Polar Air Cargo unit, Japan Airlines Corp., Hong Kong’s Cathay Pacific Airways Ltd., British Airways PLC, Germany’s Lufthansa AG, Luxembourg’s Cargolux Airlines and Lan Chile. Sources familiar with the investigation report that most airlines are closely cooperating with the authorities, although there are complaints that the investigating bodies have not fully disclosed their intent. Although currently there is little public information to support the claims of price-fixing and collusion, the discovery of illegal cooperation may serve to tarnish the reputations of some of the most respected airlines in the world. The bottom-line of these airlines may be affected as well, as harsh penalties will be dealt out to offending carriers who tried to further their profits in the burgeoning air cargo market.

Continental Readies for Newark Reopening February 12, 2006

Posted by Andrew in Uncategorized.
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In a press release issued late Sunday night, legacy carrier Continental Airlines announced that it plans to begin resuming operations at its East Coast hub, Newark Airport, on Monday. Buried under nearly two feet of snow, Continental was forced to shutdown its hub and strand thousands of passengers at the airport, which is located just outside of New York City. The storm that forced Continental Airlines to shutter its operations at Newark affected a large swathe of the East Coast, causing delays from Washington D.C to Boston. The effect of the storm was dampened by the actions of most airlines serving the Northeast region. Carriers took a proactive approach, waiving booking fees and canceling flights days in advance in preparation for the storm. Expect operations to gradually normalize over the next few days as planes are returned to their typical schedules.