LCC posts
FeedPosted Nov 10th 2009 4:15PM by Tom Johansmeyer (RSS feed)
Filed under: Southwest Airlines (LUV), US Airways Group (LCC), UAL Corp (UAUA), JetBlue Airways (JBLU), Delta Air Lines (DAL)
For years, it's been evident that smaller airlines have had an operating advantage, particularly when they use less expensive airports. They've been able to post better numbers as a result, and in the current travel slump, they've outperformed the larger carriers. Well, they've also picked up a considerable amount of market share.
According to a report by USA Today, low cost carriers now have 30% of the market in the United States. Price-sensitive consumers are turning to cheaper alternatives, even if it means (for fliers with elite status) giving up the perks they've earned through years of customer loyalty.
Continue reading Low cost carriers own 30% of domestic airline biz, growing fast
Posted Oct 29th 2009 10:50AM by Tom Johansmeyer (RSS feed)
Filed under: Bad news, Industry, China, US Airways Group (LCC)
The US Airways (NYSE: LCC) ticker symbol says it all: LCC = Low Cost Carrier. With its latest announcement, the airline may want to change it to LEC -- Low Expense Carrier. In an attempt to keep pace with the plunging travel market, US Airways is cutting 1,000 jobs next year, shoving almost all its flying to its three hubs (Philadelphia, Phoenix and Charlotte) and Washington. Several international routes are being cut.
The airline reports that routes from its hubs have been profitable. Currently, US Airways pushes 93% of its flights through these airports, a rate it seeks to push up to 99% in 2010.
Continue reading US Airways to cut 1,000 jobs, reduce some routes
Posted Sep 25th 2009 11:50AM by Eric Buscemi (RSS feed)
Filed under: Analyst reports, Analyst upgrades and downgrades, American Express (AXP), Research in Motion (RIMM), Procter and Gamble (PG), Analyst initiations
Analyst upgrades:
- FBR Capital upgraded McAfee (NYSE: MFE) to Outperform from Market Perform after channel checks indicated the company's September quarter deal flow has been stronger than expected. FBR raised its target on shares to $50 from $41.
- Thomas Weisel upgraded Adtran (NASDAQ: ADTN) to Overweight from Market Weight, citing increased wireless backhaul capex spending by Tier-1 carriers. The firm raised its target to $32 from $21.
- RBC Capital upgraded Brunswick (NYSE: BC) to Outperform from Sector Perform as the firm thinks the company no longer has liquidity risk and can generate significant profits by 2012. The firm set a $17 target on the stock.
- Bronco Drilling (NASDAQ: BRNC) was upgraded to Hold from Underperform at Jefferies.
- LSI Corp. (NYSE: LSI) was upgraded to Buy from Hold at Deutsche Bank.
- UBS upgraded U.S. Airways (NYSE: LCC) and UAL Corp. (NASDAQ: UAUA) to Buy from Neutral.
Continue reading Analyst upgrades, downgrades and initiations: AXP, CL, DLTR, PG, RIMM, UAUA ...
Posted Sep 17th 2009 5:00PM by Tom Johansmeyer (RSS feed)
Filed under: Southwest Airlines (LUV), AMR Corp (AMR), UAL Corp (UAUA), Delta Air Lines (DAL)
United Airlines (NASDAQ: UAUA), US Airways (NYSE: LCC) and American Airlines (NYSE: AMR), according to an influential analyst, have run out of options. Jamie Baker of JPMorgan said in a July 20, 2009 report that these companies couldn't do anything to prevent a cash crisis. They only savior available to them would have to be an outside investor. To call the position grim would be optimistic. Unfortunately, it couldn't have come at a worse time.
As Baker was walking the bear into the airline industry, United was starting to celebrate its change in direction. The carrier has improved its on-time rate, according to a USA Today report, and its operations are coming around. Despite the fact that the airline industry has been brutalized by the global recession, the airline has made some progress. Through August, the company's share price doubled, and its ascent has continued in September. So, the company is locked in an ongoing struggle to manage its identity, cope with its past and shape how the world sees it today.
The operational "makeover" has resulted in a reduction of its fleet from 601 jets in 2000 to 386 as of the summer of 2009. In terms of passenger traffic, it's in the #4 spot in the United States – trailing Delta (NYSE: DAL), Southwest (NYSE: LUV) and American. With Q2 revenues off 25.2% year-over-year, however, drastic measures are still necessary.
Continue reading United's battle over its identity
Posted Sep 6th 2009 3:10PM by Tom Johansmeyer (RSS feed)
Filed under: Southwest Airlines (LUV), US Airways Group (LCC), JetBlue Airways (JBLU), Delta Air Lines (DAL)
August brought more misery to the airline industry in the United States. Seven of the country's nine largest carriers saw traffic drop, with only Southwest Airlines (NYSE: LUV) and JetBlue Airways Corp (NASDAQ: JBLU) bucking the trend. The continued upward climb of unemployment, tighter corporate budgets and sluggish demand for leisure travel has resulted in fewer passengers in seats.
JetBue was the only carrier not to report a drop in available seat miles (ASMs), the primary measure of airline productivity. Load factors, however, which indicate how full a plane is, tended to be higher, largely a result of flights that have been cut in an effort to reduce costs.
Continue reading August a sluggish month for U.S. airlines
Posted Jul 30th 2009 11:40AM by Tom Johansmeyer (RSS feed)
Filed under: Southwest Airlines (LUV), AMR Corp (AMR), JetBlue Airways (JBLU), Delta Air Lines (DAL)
There may be new hope for the perpetually ailing airline industry. While I wouldn't expect these companies to become top performers anytime soon, it looks like the best revenue stream is the one nobody's been talking about: change and cancellation fees.
These penalties, which can reach up to $150, bring $2 billion in revenue into the industry annually. According to the Department of Transportation, they were good for $527.6 million in the first quarter -- in the United States alone. This is 3.2% of U.S. airline revenue.
American Airlines parent AMR (NYSE: AMR) raked in $116 million in revenue from these penalties in the first quarter of 2009 -- compared to $108 million from the more highly publicized extra bag fees. For JetBlue (NASDAQ: JBLU), the numbers are smaller (JetBlue, of course, isn't as big as AMR) but no less compelling. By pumping its change and cancellation fee from $100 to $150, the airline scored $32.2 million in Q1 2009, up from $25 million in Q1 2008.
Continue reading Could cancellation fees save the airlines?
Posted Jun 3rd 2009 8:40AM by Tom Johansmeyer (RSS feed)
Filed under: US Airways Group (LCC), JetBlue Airways (JBLU)
JetBlue Airways Corp. (NASDAQ: JBLU) is looking to sell 20 million shares of common stock and $150 million in convertible debt. Miserable conditions for the airline industry have led the low-cost carrier to turn to financial markets for the infusion that operations can't seem to deliver.
The debt, which is convertible into common stock, will be sold in two $75 million series. And the 20 million common shares would raise another $101 million (at yesterday's closing price of $5.03). If there's enough demand for the debt and equity securities, JetBlue may sell another 3 million shares of common stock and another $11.25 million in debt.
JetBlue isn't alone in raising capital. US Airways Group Inc. (NYSE: LCC) is planning to ask its shareholders to approve a measure that would double the amount of common shares it could issue to 400 million. The answer will come at the company's annual meeting on June 10, 2009.
Posted Apr 27th 2009 9:30AM by Mark Fightmaster (RSS feed)
Filed under: Before the bell, Bad news, US Airways Group (LCC), AMR Corp (AMR)
What more could go wrong for airlines, right? The swine flu outbreak has reminded some investors of the SARS epidemic in Asia, and it has
taken its toll on airlines. With the Mexican government closing schools and stores because of a public health emergency, we await a worldwide reaction. With fears of human-to-human transmission of the disease, no doubt we are going to see airlines suffer again.
Swine flu cases have reached as far as New Zealand, and cases were found in Spain, America and Canada, In the country of origin, Mexico, there have also been deaths, making this a worldwide outbreak. These concerns resulted in battered airline stocks in foreign trading. In Chinese trading, Air France KLM, Deutsche Lufthansa, British Airways, and Iberiea were all more than 7% lower. Cathay Pacific and Air China were both sharply lower as well.
Continue reading Airlines could suffer thanks to a potential swine flu epidemic
Posted Apr 22nd 2009 1:20PM by Laurie Pasternack (RSS feed)
Filed under: Analyst reports, Analyst upgrades and downgrades, Ford Motor (F), General Motors (GM), Caterpillar (CAT), Colgate-Palmolive (CL), Dean Foods (DF), US Airways Group (LCC), Lockheed Martin (LMT), Analyst initiations, Broadcom Corp'A' (BRCM), Gilead Sciences (GILD), Andersons Inc (ANDE)
Analyst upgrades:
- Merriman upgraded Dendreon (NASDAQ: DNDN) to Buy from Neutral on expectations shares will react positively to the full IMPACT data release on April 28. The firm thinks Provenge could represent the first cancer immunotherapy approved in the U.S. and raised its valuation range on the stock to $33-$34 from $18-$19.
- Piper Jaffray upgraded Andersons (NASDAQ: ANDE) as it believes the valuation is attractive, investor expectations are low, and the company's fertilizer and rail segments could recovery in FY10. The firm has a $19 target on shares. Goldman upgraded the auto sector to Neutral from Cautious and added Ford (NYSE: F) to its Conviction Buy list. The analyst does not believe Ford will have to declare bankruptcy and sees the company benefiting from Chrysler share declines and GM's (NYSE: GM) reduced product offerings. Ford's price target is $6
- Banc of America/Merrill upgraded U.S. Airways (NYSE: LCC) to Buy from Underperform.
- Broadcom (NASDAQ: BRCM) was upgraded to Equal Weight from Underweight at Morgan Stanley.
- Caterpillar (NYSE: CAT) was raised to Overweight from Neutral at JP Morgan.
Continue reading Analyst upgrades, downgrades and initiations: DNDN, ANDE, the auto sector, DGX, MTB, ADVS, ITG, MF and PCLN
Posted Jan 16th 2009 8:16AM by Melly Alazraki (RSS feed)
Filed under: Earnings reports, Analyst reports, Analyst upgrades and downgrades, Intel (INTC), Citigroup Inc. (C), Bank of America (BAC), Charles Schwab Corp (SCHW), Kellogg Co (K), US Airways Group (LCC), Genentech Inc (DNA), Goldcorp Inc (GG)
Bank of America (NYSE: BAC) is getting $20 billion from the government to help it with its purchase of Merrill Lynch. Also, the government will protect an asset pool worth $118 billion. This morning, Bank of America also reported quarterly results, posting a
net loss of $1.8 billion for the fourth quarter. For all of 2008, the bank managed to somehow post a profit of $4 billion, which is much less than its $15 billion net income from 2007. Bank of America blamed "escalating credit losses" as well as writedowns and trading losses in capital markets. The bank also reported that Merrill Lynch, which it acquired on Jan. 1 -- after the fourth quarter ended, lost more than $15 billion in the fourth quarter. BAC shares were nearly 5% higher in premarket trading after dropping over 18% Thursday.
Citigroup Inc. (NYSE: C) meanwhile will be guaranteed on $301 billion of assets. Citigroup also reported fourth-quarter results this morning, posting a
net loss of about $8.3 billion, or $1.72 per share. Not surprising, it also blamed write-downs and losses in securities and banking, as well as "higher credit losses." For the full year 2008, Citigroup reported a net loss of about $18.7 billion, or $3.88 per share. Finally, Citigroup announced it was splitting into two parts: Citigroup, to handle traditional banking, and Citi Holdings, to manage the riskier assets including brokerage and retail asset management, local consumer finance and a special asset pool. Citi shares were almost 5% higher in premarket trading after dropping over 15% Thursday.
Intel Corp. (NADSAQ: INTC) reported Thursday after the close a 90% drop in fourth-quarter earnings $234 million, or 4 cents per share, compared with $2.3 billion, or 38 cents per share, in the year-ago period. Sales slumped 23%, in line with Intel's previous guidance. Still, the results were inline with Wall Street's reduced expectations. This was enough to have the stock trade 3% higher in premarket action.
Continue reading Stocks in the news: BAC, C, INTC, DNA, GM, SCHW, LCC, BKS, K, GG
Posted Jan 15th 2009 4:03PM by Sarah Gilbert (RSS feed)
Filed under: US Airways Group (LCC)

US Airways flight number 1549 from Laguardia to Charlotte went down around 3:30 p.m., crashing in the Hudson River near 57th Street in New York City. The plane is floating and rescuers are on the scene; it looks as if most of the 148 passengers and crew are being rescued via life rafts. On the news,
US Airways (NYSE:
LCC) stock was (surprisingly) up 16 cents to $7.55.
Updates: According to an FAA spokesperson, the plane may have been hit by birds. And reports are that everyone survived the crash (which was in shallow water); passengers didn't even get wet.
Posted Aug 15th 2008 2:19PM by Todd Harrison (RSS feed)
Filed under: US Airways Group (LCC), Oil
Minyanville Professor Minyan Peter dares to share the kind of keen insight and actionable information you won't find in any prospectus. For more original thought, visit www.minyanville.com.
As many people have heard before, there are only two times a company issues common stock: When it absolutely has to or when it is stupid not to.
Well yesterday's issuance by US Airways (NYSE: LCC) may represent that once in a lifetime opportunity to see those seemingly contradictory principles in action at the same time. Having seen its stock trade at $1.45 not a month ago, $8.50 must seem pretty sweet to US Airways management, particularly with strong technical resistance at $10.00 providing a pretty strong ceiling above.
With airline stocks trading as the most leveraged play on the price declines in oil, I can understand why US Airways management took advantage of the window being open to issue stock. But just because the issuance window is open, doesn't mean investors should jump.
Next Page >