BloggingStocks

Northwest Airlines to cut 2,500 jobs, charge $15 per piece of checked luggage

Brian White — Thu, 10 Jul 2008 09:09:00 EST

Northwest Airlines Corp. (NYSE: NWA) is feeling the heat of high oil prices like most of us, and announced 2,500 job cuts (8.3% of its workforce) yesterday evening. In addition to the job cuts, the regional air carrier will now charge $15 for a single piece of carry-on luggage. Want to redeem some frequent-flier rewards? It'll cost you another $100.

Northwest isn't the first (and won't be the last) to charge for almost any luggage brought on board by customers. With all the other (undisclosed) fees it will be adding to its services, the carrier said that it expected to add $250 million to $300 million a year in revenue. Sounds like what the telecom companies have been doing for years sliding in fees to prop up profits.

Northwest CEO Doug Steenland said, "These reductions are the direct result of our extraordinary fuel costs and the necessary actions we must take to right-size our airline and eliminate unprofitable flying." Regarding the frequent-flier redemptions, Steenland indicated that Northwest would charge $25 for domestic tickets, $50 for trans-Atlantic tickets and $100 for trans-Pacific tickets -- but did call the new frequent-flier service fees "temporary."

Northwest Airlines to cut 2,500 jobs, charge $15 per piece of checked luggage originally appeared on BloggingStocks on Thu, 10 Jul 2008 09:09:00 EST. Please see our terms for use of feeds.

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Airlines ditching long distance flights to combat fuel prices

Michael Fowlkes — Tue, 08 Jul 2008 14:52:00 EST

Filed under: International Markets, Bad News, Products and Services, Consumer Experience, Competitive Strategy, China, US Airways Group (LCC), UAL Corp (UAUA), Oil, Recession

Fuel prices seem to be the number one concern on just about everyone's mind lately, and it seems like things are not going to be getting better any time soon. As prices have risen to record levels, many of us have decided to cut back on our driving, especially on long trips in order to save a little on our fuel prices. Well, the airlines are no different, and there's an interesting report today in The Wall Street Journal showing how airlines are cutting back on long flights in order to save a little on fuel consumption.

It is a pretty nasty cycle we are seeing with the airlines. The higher fuel costs have led to higher tickets prices and extra fees. These higher prices have led to less air traffic, and that has led to an even greater need to find more ways to cover rising costs. Definitely a tough situation.

The new way they are starting to combat the high costs of flying is by cutting back, or postponing long international flights, in particular flights that are in excess of 12 hours.

Continue reading Airlines ditching long distance flights to combat fuel prices

Airlines ditching long distance flights to combat fuel prices originally appeared on BloggingStocks on Tue, 08 Jul 2008 14:52:00 EST. Please see our terms for use of feeds.

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BusinessWeek: Be wary of stocks under $10

Eliza Popescu — Wed, 02 Jul 2008 15:45:00 EST

Filed under: Forecasts, Consumer Experience, Competitive Strategy, Apple Inc (AAPL), Ford Motor (F), Motorola (MOT), Research in Motion (RIMM), Washington Mutual (WM), Economic Data, JetBlue Airways (JBLU)

The weak market conditions have caused many stock prices to fall under $10. Not only smaller -- and perhaps lesser known -- stocks trade under $10 these days, but also some big and famous names such as Ford Motor Co. (NYSE: F), Motorola Inc. (NYSE: MOT), Sprint Nextel Corp. (NYSE: S), Washington Mutual Inc. (NYSE: WM) and Del Monte Foods (NYSE: DLM), as well as many airline companies like Northwest Airlines (NYSE: NWA) and JetBlue (NASDAQ: JBLU).

While those names could sound tempting for investors who may think they are cheap, BusinessWeek's Karyn McCormack reminds us that not everything that is cheap is a good bargain, and there are some risks that need to be taken into account.

One common problem for most of these stocks is that they trade under $10 for a reason. That reason is usually hardly any earnings growth, if any at all. And with a weak economy, these companies would have an even harder time to stimulate growth. Add to the mix the fact that institutional investors don't like to touch stocks under $10 and the potential for recovery is not good.

Continue reading BusinessWeek: Be wary of stocks under $10

BusinessWeek: Be wary of stocks under $10 originally appeared on BloggingStocks on Wed, 02 Jul 2008 15:45:00 EST. Please see our terms for use of feeds.

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United, US Airways reportedly will merge

Jonathan Berr — Mon, 28 Apr 2008 16:29:00 EST

Filed under: Deals, US Airways Group (LCC), UAL Corp (UAUA), Delta Air Lines (DAL)

Another day. Another merger of two struggling airlines.

This time it''s UAL Corp.'s (NYSE: UAUA) United Airlines and US Airways Inc. (NYSE: LCC), which together lost more than $773 million in the first quarter are reportedly in are "advanced" merger talks, two sources familiar with the situation told The Associated Press. These "sources" may be public relations people who are leaking details of the deal at the direction of the investment bankers and the companies themselves.

Wall Street is reacting positively to the news sending shares of US Airways in mid-afternoon trading. I am not so sure a celebration is in order. For one thing, as Reuters and the Associated Press both have noted this is a marriage of necessity.

"The discussions intensified over the weekend after Continental Airlines Inc, which had been in negotiations with United, pulled out to explore a potential marketing alliance with AMR Corp's American Airlines and British Airways Plc," according to Reuters.

The combined company would have to compete against the combined Delta Airlines Inc. (NYSE: DAL) and Northwest Airlines Corp. (NYSE: NWA) which will create the largest airline.

Airline mergers have had such a lousy track record, what makes people think these will be any different?

United, US Airways reportedly will merge originally appeared on BloggingStocks on Mon, 28 Apr 2008 16:29:00 EST. Please see our terms for use of feeds.

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Newspaper wrap-up: Delta pilots agree to changes, clears way for merger

Laurie Pasternack — Fri, 11 Apr 2008 09:15:00 EST

Filed under: Newspapers, Magazines, General Motors (GM), Delta Air Lines (DAL)

MAJOR PAPERS:

According to people familiar with the matter, the Wall Street Journal reported that home-furnishings retailer Linens 'n Things, acquired by Apollo Management in 2006 and caught by a shrinking housing market and increasing debt load, is expected to file for Chapter 11 bankruptcy-court protection by Tuesday.

OTHER PAPERS:

The Detroit News reported that Delta Air Lines Inc (NYSE: DAL) pilots have agreed to a contract revision that clears the way for Delta and Northwest Airlines Corporation (NYSE: NWA) to announce a merger next week, according to sources close the matter.
The United Auto Workers union notified General Motors Corporation (NYSE: GM) of its deadline to strike three factories in Michigan if the two are unable to agree on local labor pacts, the Detroit News reported.
The Business Standard reported that Toyota Motor Corporation (NYSE: TM) is planning to invest Rs 1,400 crore in Toyota Kirloskar Motor, its India subsidiary to set up its second plant in the country.

Newspaper wrap-up: Delta pilots agree to changes, clears way for merger originally appeared on BloggingStocks on Fri, 11 Apr 2008 09:15:00 EST. Please see our terms for use of feeds.

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Delta (DAL) and Northwest (NWA) talk merger, again

Douglas McIntyre — Mon, 07 Apr 2008 09:09:00 EST

Filed under: Deals, Industry, Consumer Experience, Delta Air Lines (DAL), Recession

The on again, off again merger talks between Delta (NYSE: DAL) and Northwest (NYSE: NWA) have started again according to the Financial Times. They are being driven by an up-turn in fuel costs and a potential down-turn in traffic. The pilot's union, which had blocked earlier attempts at a merger, may be left on the sidelines for now. The boards of the two companies believe that they are bargaining for the survival of their respective companies.

While the last set of talks broke down in February, according to the FT, "Executives at Minnesota-based Northwest have since put pressure on their counterparts at Delta to proceed without the pilots' support."

A merger will not help with fuel costs and unions are not likely to give in to job cuts, raising the issue of strikes. Yet the big airlines feel that they must act even if it only saves them a dime. Most of the large airlines have big debt loads and falling cash-flow. Mergers often cause problems with customer service while the parties try to mesh their reservations systems and IT.

If fuel costs keep marching up and a deep recession keeps people off planes, Northwest and Delta can go into Chapter 11 as a combined company instead of separately.

Douglas A. McIntyre is an editor at 247wallst.com.

Delta (DAL) and Northwest (NWA) talk merger, again originally appeared on BloggingStocks on Mon, 07 Apr 2008 09:09:00 EST. Please see our terms for use of feeds.

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Newspaper wrap-up: TPG, others, to invest $5B Washington Mutual

Laurie Pasternack — Mon, 07 Apr 2008 07:53:00 EST

Filed under: Newspapers, Magazines, JPMorgan Chase (JPM), Goldman Sachs Group (GS), Washington Mutual (WM), Delta Air Lines (DAL)

MAJOR PAPERS:

Troubled savings and loan giant Washington Mutual Incorporated (NYSE: WM) will receive a $5B investment from private equity firm TPG and other investors, the Wall Street Journal reported. For now, this eliminates the possibility that it will be acquired by another financial institution such as J.P. Morgan Chase & Co (NYSE: JPM).
The Wall Street Journal also reported that music downloading copyright infringement lawsuits against Baidu.com Inc (NASDAQ: BIDU) and Sohu.com Inc (NASDAQ: SOHU) may be heard by a Chinese court.
People close to the situation said that Delta Air Lines Inc (NYSE: DAL) and Northwest Airlines Corporation (NYSE: NWA) have revived merger talks. It is speculated, the Financial Times reported, that weak demand and high fuel costs are urging the airliners back to the table to work out a merger arrangement.

OTHER PAPERS:

Evergreen Solar Inc (NASDAQ: ESLR) is expected to announce today that it will double the size of its manufacturing facility in Massachusetts and add about 350 new jobs as part of its ongoing expansion, according to the Boston Globe.

WEB SITES:

Bloomberg reported that The Goldman Sachs Group Inc (NYSE: GS) has been the only major investment bank that has refused to reduce its leverage. In fact, Goldman's adjusted leverage ratio of assets rose to 18.6 at the end of February, from 17.5 at the end of November.

Newspaper wrap-up: TPG, others, to invest $5B Washington Mutual originally appeared on BloggingStocks on Mon, 07 Apr 2008 07:53:00 EST. Please see our terms for use of feeds.

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Newspaper wrap-up: More layoffs coming to Citigroup?

Laurie Pasternack — Thu, 20 Mar 2008 07:55:00 EST

Filed under: Newspapers, Magazines, Ford Motor (F), Citigroup Inc. (C), Delta Air Lines (DAL), Bear Stearns Cos (BSC)

MAJOR PAPERS:

Following the collapse of The Bear Stearns Companies Inc (NYSE: BSC), the industry is rampant with rumors wondering about the financial well being of scores of other institutions, according to a Wall Street Journal report called "The Credit Crisis Hits Wall Street". True or not, its giving fits to the companies, regulators, and investors.
Skyrocketing fuel prices and a weakened economy are taking their toll on the airline industry, reported the Wall Street Journal. Additionally, the proposed Delta Air Lines Inc (NYSE: DAL) merger with Northwest Airlines Corporation (NYSE: NWA) has lost its momentum as airline pilots cannot agree on a structured seniority system.

OTHER PAPERS:

According to people close to the situation, the New York Times reported that before the end of the month, Citigroup Incorporated (NYSE: C) is planning to lay off another 2,000 investment bankers and traders.
The Detroit News reported that Ford Motor Company (NYSE: F) appears to have fallen short of its goals in the latest, and possibly last, round of company-wide buyouts for hourly workers.

Newspaper wrap-up: More layoffs coming to Citigroup? originally appeared on BloggingStocks on Thu, 20 Mar 2008 07:55:00 EST. Please see our terms for use of feeds.

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Newspaper wrap-up: Bush plans more funds for mortgages

Laurie Pasternack — Tue, 18 Mar 2008 09:00:00 EST

Filed under: Newspapers, Magazines, BHP Billiton Ltd ADR (BHP), Rio Tinto plc ADS (RIO), Delta Air Lines (DAL)

MAJOR PAPERS:

To help stabilize the housing market, the Wall Street Journal reported that the Bush Administration is planning to help create fresh funding for mortgages. The plan, which still requires final approval, is said to ease an excess-capital requirement for government sponsored organizations Federal National Mortgage Association (NYSE: FNM), or Fannie Mae, Federal Home Loan Mortgage Corporation (NYSE: FRE), or Freddie Mac, and the Federal Housing Administration.
The Wall Street Journal also reported that a merger between Northwest Airlines Corporation (NYSE: NWA) and Delta Air Lines Inc (NYSE: DAL) may be derailed after Delta pilots notified executives they remain unable to reach an agreement with Northwest pilots on how to integrate pilot ranks should the two combine.
The Financial Times reported that BAE Systems Plc (OTC: BAESY) won a $715M order to supply nearly 1,500 mine-resistant vehicles from the U.S. government.

OTHER PAPERS:

The Chinese government has locked out Australian mining giants BHP Billiton Limited (NYSE: BHP) and Rio Tinto Plc (NYSE: RTP) from selling iron ore into its daily spot market, the Sydney Morning Herald reported. Mining sources said that the decision may have already cost Australia up to $300M in export profits.

Newspaper wrap-up: Bush plans more funds for mortgages originally appeared on BloggingStocks on Tue, 18 Mar 2008 09:00:00 EST. Please see our terms for use of feeds.

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Newspaper wrap-up: Talks between Delta and Northwest hit an impasse

Laurie Pasternack — Wed, 27 Feb 2008 08:00:00 EST

Filed under: Newspapers, Magazines, Delta Air Lines (DAL)

MAJOR PAPERS:

A memo sent by Delta Air Lines Inc (NYSE: DAL) to the company's employees regarding Delta's merger talks with Northwest Airlines Corporation (NYSE: NWA) stated that that no "potential transaction meets all [of Delta's] principles." The memo, the Wall Street Journal reported, is seen as a sign that merger talks between Delta and Northwest have stalled.
A group of 14 hospitals and the Securities Industry and Financial Markets Association, a Wall Street trade group, asked the SEC to buy back the debt they had issued, the Wall Street Journal also reported.
German lender HSH Nordbank has filed a lawsuit against UBS AG (NYSE: UBS) for allegedly maneuvering to saddle the German bank with troubled securities. HSH Nordbank contends that UBS sold it $500M in complex investments, which a UBS hedge fund later used as a receptacle for troubled subprime-mortgage securities, according to the Wall Street Journal.

WEB SITES:

According to FAO Newsroom, world fertilizer production is expected to outstrip demand over the next five years and will support higher levels of food and biofuel production.

Newspaper wrap-up: Talks between Delta and Northwest hit an impasse originally appeared on BloggingStocks on Wed, 27 Feb 2008 08:00:00 EST. Please see our terms for use of feeds.

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Newspaper wrap-up: Lufthansa could take stake in Continental, United combination

Laurie Pasternack — Wed, 20 Feb 2008 08:00:00 EST

Filed under: Newspapers, Magazines, UAL Corp (UAUA), KKR Financial (KFN), Delta Air Lines (DAL)

MAJOR PAPERS:

The Wall Street Journal reported that KKR Financial Holdings LLC (NYSE: KFN), a unit of Kohlberg Kravis Roberts, revived concerns of a credit crunch after it asked for a restructuring of billions of dollars in short-term debt.

OTHER PAPERS:

According to sources, the Chicago Tribune reported that Deutsche Lufthansa AG (OTC: DLAKY) could look to take an equity stake in a merger between Continental Airlines Inc (NYSE: CAL) and UAL Corporation's (NASDAQ: UAUA) United Airlines.
The Associated Press reported that the pilots' unions of Delta Air Lines Inc (NYSE: DAL) and Northwest Airlines Corporation (NYSE: NWA) are unable to agree on how seniority for the companies' pilots would work under a combined carrier. The impasse puts the deal in "serious jeopardy," inside sources reported.

WEB SITES:

Electronics retailer Sharper Image Corporation (NASDAQ: SHRP) has filed for bankruptcy, citing declining sales and profitability, Bloomberg reported.

Newspaper wrap-up: Lufthansa could take stake in Continental, United combination originally appeared on BloggingStocks on Wed, 20 Feb 2008 08:00:00 EST. Please see our terms for use of feeds.

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Option update: Continental volatility at 71 on renewed reports of deal talk with UAUA

Paul Foster — Fri, 15 Feb 2008 09:57:00 EST

Filed under: Deals, Contl Airlines'B' (CAL), UAL Corp (UAUA), Options, Delta Air Lines (DAL)

Continental (NYSE: CAL) closed at $28.70 Thursday.

CAL and United Airlines (NYSE: UAUA) are in advanced negotiations and could complete a combination quickly if Delta (NYSE: DAL) and Northwest Airlines (NYSE: NWA) strike a deal, says Dow Jones.

WTI Crude oil is recently up .12% to $95.57 according to Bloomberg.

CAL March option implied volatility of 71 is above its 26-week average of 58 according to Track Data, suggesting larger price movement.

Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com

Option update: Continental volatility at 71 on renewed reports of deal talk with UAUA originally appeared on BloggingStocks on Fri, 15 Feb 2008 09:57:00 EST. Please see our terms for use of feeds.

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Newspaper wrap-up: Airline mergers may soon fly

Laurie Pasternack — Thu, 07 Feb 2008 08:15:00 EST

Filed under: Newspapers, Magazines, Google (GOOG), Berkshire Hathaway (BRK.A), News Corp'B' (NWS), UAL Corp (UAUA), Delta Air Lines (DAL)

MAJOR PAPERS:

Within two weeks a merger between Delta Air Lines Inc (NYSE: DAL) and Northwest Airlines Corporation (NYSE: NWA) is expected to be announced. Not far behind may be one between UAL Corporation's (NASDAQ: UAUA) United Airlines and Continental Airlines Inc (NYSE: CAL), the Wall Street Journal reported.

WEB SITES:

Bloomberg reported that Berkshire Hathaway Inc (NYSE: BRK.A) Chairman Warren Buffett forecast that the dollar's value is likely to decline if policies remain unchanged and said he believes a credit crunch is not under way.
Tech Crunch reported that either Google Inc (NASDAQ: GOOG) or News Corp's (NYSE: NWS.A) MySpace is likely to announces a social space acquisition in the near-future. According to industry sources, the acquisition could be in the $1B-$1.5B range and may involve Bebo.

Newspaper wrap-up: Airline mergers may soon fly originally appeared on BloggingStocks on Thu, 07 Feb 2008 08:15:00 EST. Please see our terms for use of feeds.

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Newspaper wrap-up: Delta, Air France may be able to shape a deal

Eric Buscemi — Thu, 17 Jan 2008 08:20:00 EST

Filed under: Newspapers, Magazines, Sun Microsystems (JAVA), Oracle Corp (ORCL), UAL Corp (UAUA), Delta Air Lines (DAL)

MAJOR PAPERS:

Although Delta Air Lines Inc (NYSE: DAL) would like to merge with either UAL Corporation's (NASDAQ: UAUA) United Airlines or Northwest Airlines Corporation (NYSE: NWA), the company is close to Air France-KLM (NYSE: AKH), and together the two may be able to better shape a deal, the Wall Street Journal's "Heard on the Street" reported.
The Wall Street Journal also reported that recent acquisitions by Sun Microsystems Inc (NASDAQ: JAVA) and Oracle Corporation (NASDAQ: ORCL) have suggested factors like a slowing economy could kick the high-tech deals into a "higher gear".
Following a risk/reward reassessment, UBS AG (NYSE: UBS) decided to wind down its Switzerland-based private banking business for rich U.S. clients; the decision was announced internally in late December, but confirmed publicly this week, the Financial Times reported.

OTHER PAPERS:

According to the Economic Times, after the dissolution of a proposed joint venture with Rajesh Exports, Fossil Incorporated (NASDAQ: FOSL), the U.S. fashion accessories giant, is set to enter India on its own.

Newspaper wrap-up: Delta, Air France may be able to shape a deal originally appeared on BloggingStocks on Thu, 17 Jan 2008 08:20:00 EST. Please see our terms for use of feeds.

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Analyst initiations: WX, MYGN, CYPB and KNOL

Eric Buscemi — Tue, 18 Sep 2007 11:20:00 EST

Filed under: Analyst Reports, Electronic Arts (ERTS), Activision Inc (ATVI), Analyst Initiations, Delta Air Lines (DAL)

MOST NOTEWORTHY: Aerospace stocks, WuXi Pharma, Myriad Genetics, Cypress Bioscience and Knology were today's noteworthy initiations:

LYON initiated shares of aerospace stocks including Goodrich Corporation (NYSE: GR), TransDigm Group Inc (NYSE: TDG) and Triumph Group Incorporated (NYSE: TGI) with Add ratings and a $74 target, $45 target and $90 target, respectively.
WuXi Pharmatech (NYSE: WX) was started with a Hold rating and $29 target at Jefferies on valuation. JP Morgan started shares with a Neutral rating and Credit Suisse initiated shares with an Outperform rating.
Myriad Genetics Inc (NASDAQ: MYGN) was started with a Hold rating and $50 target at Citigroup, as the firm is cautious on the Phase III Flurizan results and does not recommend putting new money here at these levels.
Citigroup also initiated shares of Cypress Biosciences Inc (NASDAQ: CYPB) with a Buy rating and $22 target as the firm believes Milnacipran has sufficient database for approval and is capable of gaining meaningful market share as firstline therapy.
Knology Inc (NASDAQ: KNOL) was initiated with a Buy rating and $25 target at BWS Financial, as the firm believes the company's growth potential is greater than other cable companies through a business plan that allows it to have operations in all regions of the U.S.

OTHER INITIATIONS:

Wachovia resumed coverage of Liberty Media Corporation (NASDAQ: LCAPA) with an Outperform rating.
Northwest Airlines Corporation (NYSE: NWA) and Delta Air Lines Inc (NYSE: DAL) were initiated with Overweight ratings at JP Morgan.
Thomas Weisel started shares of Tyco Electronics (NYSE: TEL) with a Market Weight rating.
Goldman initiated shares of Electronic Arts Inc (NASDAQ: ERTS) and Activision Inc (NASDAQ: ATVI) with Buy ratings and THQ Inc (NASDAQ: THQI) with a Neutral rating.

Analyst initiations: WX, MYGN, CYPB and KNOL originally appeared on BloggingStocks on Tue, 18 Sep 2007 11:20:00 EST. Please see our terms for use of feeds.

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Potential trade on new Delta (DAL) CEO

Brent Archer — Wed, 22 Aug 2007 11:10:00 EST

Filed under: Deals, Good news, Rumors, Management, Options, Technical Analysis, Delta Air Lines (DAL)

Delta Air Lines Inc. (NYSE: DAL) has selected Richard H. Anderson to replace its retiring CEO, a move that analysts believe will pave the way for potential mergers with other airlines. Deals could happen within the next year, as such ventures may have a harder time getting approval if Republicans lose control of the White House in 2008. Analysts specifically named Northwest Airlines (NYSE: NWA) as a merger candidate with Delta, since the new CEO was formerly in charge at NWA.

After hitting a one year high of $21.95 in April, the stock has been suffering lately, hitting a year low of $14.94 earlier this month. This morning, DAL opened at $18.15. So far today the stock has hit a low of $17.74 and a high of $18.65. As of 10:55, DAL is trading at $18.10, up $0.39 (2.2%). The chart for DAL looks bearish but improving, and S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bullish hedged play on this stock, I would consider an October bull-put credit spread below the $15 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk and leverage returns. For this particular trade, we will make a 8.7% return in just 2 months as long as DAL is above $15 at October expiration. Delta would have to fall by more than 17% before we would start to lose money.

DAL hasn't been below $15 by more than a few cents since it emerged from bankruptcy and has shown support around $15 recently. This trade could be risky if crude oil prices soar again, but even if that happens, this trade could be protected by its support right around $15.

Brent Archer is an options analyst and writer at Investors Observer. DISCLOSURE: At publication time, Brent neither owns nor controls positions in DAL or NWA.

Potential trade on new Delta (DAL) CEO originally appeared on BloggingStocks on Wed, 22 Aug 2007 11:10:00 EST. Please see our terms for use of feeds.

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Northwest (NWA) would rather buy competition than improve

Tom Barlow — Mon, 13 Aug 2007 13:00:00 EST

Filed under: Deals, Bad News, Private Equity, Contl Airlines'B' (CAL)

In another lap tray to the belly, customers of Milwaukee-based Midwest Air Group (NYSE: MEH), repeatedly named as one of the nation's best airlines for customer service and comfort, learned today that the airline will be purchased by a group led by TPG Capital. The investor group includes Midwest's competitor Northwest Airlines (NYSE: NWA), which is reviled by passengers for its cattle-car seating, lack of timeliness and failure to understand the concept of customer service

The acquisition offers little in the way of synergy to the two airlines. They duplicate many routes, and Midwest flies the Boing 717, while Northwest uses 747s and 757s. What the deal does accomplish is to block the expansion of a potential competitor in Northwest's upper midwest routes. While the deal secures the present management of Midwest, I suspect it's just a matter of time before the malaise reaches Milwaukee.

Midwest has been fighting off suitor Airtran Holdings' (NYSE: AAI) hostile takeover attempt, which reached $15.75 and $389 million before it folded its cards late last week. TPG, which grew out of the Continental Airlines (NYSE: CAL) takeover in 1993, is offering $16 per share, or over $400 million, to take the company private. The Midwest board voted Sunday to go forward with the TPG offer, and an agreement is expected by midweek.

Northwest (NWA) would rather buy competition than improve originally appeared on BloggingStocks on Mon, 13 Aug 2007 13:00:00 EST. Please see our terms for use of feeds.

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More trouble for Northwest passengers

Michael Fowlkes — Mon, 30 Jul 2007 11:25:00 EST

Filed under: Bad News, Products and Services, Consumer Experience, Competitive Strategy

Travelers expecting to fly on Northwest Airlines (NYSE: NWA) had another tough couple of days this past weekend. The company has been plagued recently by an insufficient pilot workforce, which forced the airline to cancel hundreds of planned flights over the weekend.

The official line coming out of the company is that flights were forced to be canceled as a result of "significant spikes" in pilot absenteeism, but has been very careful not to come straight out and accuse the pilots of an illegal job action. Northwest emerged from bankruptcy a couple months ago, and during the course of its bankruptcy procedures was able to win concessionary labor contracts. This, obviously, has not gone over too well with its workforce, and could be part of the problem that has led to the "spike in absenteeism."

This train of thought, however, is quickly negated by Monty Montgomery, who is the spokesman for the Air Line Pilots Association branch at Northwest. According to Mr. Montgomery, the problem here has nothing to do with any unhappiness among Northwest pilots, but instead, the blame can be put squarely on Northwest's shoulders. In an official statement regarding this past weekend's cancellations, Mr. Montgomery stated that the problem "is and always has been a staffing problem."

Continue reading More trouble for Northwest passengers

More trouble for Northwest passengers originally appeared on BloggingStocks on Mon, 30 Jul 2007 11:25:00 EST. Please see our terms for use of feeds.

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Airlines encouraging driving vacations

Tom Barlow — Wed, 27 Jun 2007 09:51:00 EST

Filed under: Ford Motor (F), General Motors (GM), US Airways Group (LCC), UAL Corp (UAUA), JetBlue Airways (JBLU)

In what might prove to be great news for General Motors Corp. (NYSE: GM) and Ford Motor Co. (NYSE: F), the airline industry continues to foul its own nest by treating customers like egg-laying hens, penning them up until they've been squeezed dry, then plucking them clean.

Northworst, I mean, Northwest Airlines Corp. (NYSE: NWA) is the current worst-in-class, as its 'passengers' have been caught in the middle of a labor dispute between pilots and the airline, facing canceled flight after canceled flight. However, Northwest is just one of many culprits in this effort to convince the American public to take a car vacation.

US Airways (NYSE: LCC), aka 'Air Mañana,' was the perpetrator of six of the ten most delayed fights in April. We all remember the JetBlue (NASDAQ: JBLU) debacle this winter, and NPR's Scott Simon has documented his ongoing problems with United Airline's (NASDAQ: UAUA) unresponsive lost luggage department.

Even with airlines padding their flight times to increase on-time arrivals, almost one in every four is delayed. And while the industry continues to use weather as the whipping boy, according to FAA statistics it accounts for less than 1% of delays.

As we enter the vacation season, I would have expected the airline industry to put its best foot forward. Instead, it seems to be dropping its collective drawers to moon us. My advice? Drive. Yes, you'll be cooped up in a small chair, but you can get up to pee any time you wish.

Flight delay info can be found on the FAA website.

Airlines encouraging driving vacations originally appeared on BloggingStocks on Wed, 27 Jun 2007 09:51:00 EST. Please see our terms for use of feeds.

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AMR's long, hard journey back to profitability

Joseph Lazzaro — Wed, 17 Jan 2007 16:05:00 EST

Filed under: International Markets, Earnings Reports, Good news, AMR Corp (AMR)

AMR Corp (NYSE:AMR), parent of American Airlines, Wednesday reported its first annual profit since 2000, posting Q4 earnings of 7 cents per share. That may not sound like much, but the airlines have weathered a recession/overcapacity-driven slump. Consider: In Q4 2005 AMR lost -$3.46 per share, or $600 million. For 2006, AMR earned 98 cents per share, up from a loss of -$5.18 per share in 2005.

With excess capacity reduced, the U.S. economy growing, and travelers acclimating themselves to the travel safety/security requirements of the new era, legacy carriers like AMR have slowly crawled their way back to profitability. Further, if fuel costs - - which have started to moderate - - remain at tolerable levels, airline earnings should increase again in 2007.

Investment Analysis: AMR, currently trading at around $39, remains a high-risk stock not suitable for conservative- or moderate-risk investors. However, if your portfolio can tolerate a high-risk, cyclical stock, consider adding a half-position of AMR. Buy 50 shares if you typically buy 100 shares; 250 if you buy 500.

AMR's long, hard journey back to profitability originally appeared on BloggingStocks on Wed, 17 Jan 2007 16:05:00 EST. Please see our terms for use of feeds.

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