More Monday merger fun, this time from the airline sector. Reportedly, Southwest Airlines (LUV) announced that it will purchase AirTran Airlines for roughly $1.42 billion.

This move will be funded mainly with debt, and it will help Southwest establish a larger presence in cities like Boston and New York. What's more (as the article points out), Southwest will now be in "head-to-head competition with Delta Air Lines in Delta's home base of Atlanta."

Continue reading Southwest Airlines to Purchase AirTran

Southwest Airlines to Purchase AirTran originally appeared on BloggingStocks on Mon, 27 Sep 2010 11:00:00 EST. Please see our terms for use of feeds.

Early this morning, United Airlines (UAUA) and Continental Airlines (CAL) announced that they will join forces to create the world's largest airline in a $3 billion deal.

The new airline will be bigger than Delta Air Lines (DAL) and will send flights as far as Shanghai and South America. The companies believe that the span of destinations should attract more business travelers and their higher fares. The deal, which will need approval from shareholders and antitrust regulators, is expected to close in the fourth quarter. The new company will be known as United Continental Holdings and will be based in Chicago. The airline's largest hub will be located in Houston.

Continue reading United Continental Merger a Sign of Things to Come?

United Continental Merger a Sign of Things to Come? originally appeared on BloggingStocks on Mon, 03 May 2010 11:00:00 EST. Please see our terms for use of feeds.

Continue reading United Airlines and US Airways Discussing Possible Merger

United Airlines and US Airways Discussing Possible Merger originally appeared on BloggingStocks on Thu, 08 Apr 2010 08:00:00 EST. Please see our terms for use of feeds.

The fact that 769.6 million passengers stepped onto planes in the U.S. last year sounds pretty impressive, right? Well, it's 5.3% less impressive than the year before, when 812.3 million boarded flights ... not to mention the 838.2 million in 2007.

The airline industry has spent the past two years getting brutalized by the global recession, which finally pushed it below the 800 million passenger threshold for the first time since 2004, when 763.7 million passengers took to the skies.

Continue reading Airlines Spanked with $4.6 Billion Loss Last Year

Airlines Spanked with $4.6 Billion Loss Last Year originally appeared on BloggingStocks on Tue, 30 Mar 2010 09:30:00 EST. Please see our terms for use of feeds.

The silver lining to the travel slump last year was that fewer flights made it easier for airlines to hit their deadlines. In 2009, the airline sector had its best year for on-time arrivals since 2003, largely because many routes were cut as passenger traffic fell and companies looked for ways to cut costs. According to the Department of Transportation, airlines hit a 79.5% on-time rate last year (which includes flights that were within 15 minutes of their arrival time).

Hawaiian Airlines had the best record, but it's a small regional, lacking the challenges of the major carriers. Among the big guys, Southwest's (LUV) 83% on-time rate was best, and United's (UAUA) 81% was tops for traditional air carriers. Of course, these airlines and the rest of the sector were helped along by the fact that they pad their schedule, which makes it a hell of a lot easier to show up on time.

Continue reading United Airlines Buys On-Time Success

United Airlines Buys On-Time Success originally appeared on BloggingStocks on Sun, 14 Feb 2010 10:20:00 EST. Please see our terms for use of feeds.

Continue reading American Airlines Keeps Tacking On Charges

American Airlines Keeps Tacking On Charges originally appeared on BloggingStocks on Thu, 11 Feb 2010 11:50:00 EST. Please see our terms for use of feeds.

No profit no bonus -- hell, make that no salary. The new CEO of Continental Airlines (CAL), Jeffery Smisek, says he won't take any salary or annual bonus until he brings the airline to profitability.

Smisek took the top job at Continental after the previous CEO, Lawrence Kellner, left the gig to go to a private equity firm. Last year, the firm lost $367 million in the first three quarters. A Thomson Reuters survey of analysts expects a fourth quarter loss of at least $38 million, though they're looking for a profit of at least $190 million for this year. So, Wall Street has already set Smisek's goal for him.

Continue reading Continental CEO Not Taking a Dime Until Profit Comes

Continental CEO Not Taking a Dime Until Profit Comes originally appeared on BloggingStocks on Tue, 05 Jan 2010 09:40:00 EST. Please see our terms for use of feeds.

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

Low cost carriers own 30% of domestic airline biz, growing fast originally appeared on BloggingStocks on Tue, 10 Nov 2009 16:15:00 EST. Please see our terms for use of feeds.

Across the country, big jets are disappearing -- nudged shoved aside by the little guys, which are cheaper to operate and don't require as many butts to fill seats.

The number of empty seats falls, and revenue per available seat-mile (RASM) goes up. It's pretty straightforward. But, for crowded flights, this could leave a few people stuck without their preferred routes. The alternative, of course, is an unsustainable status quo, in which a few passengers remain happy ... until the airline folds.

Continue reading Regional airlines find some upside in a tough market

Regional airlines find some upside in a tough market originally appeared on BloggingStocks on Tue, 03 Nov 2009 11:20:00 EST. Please see our terms for use of feeds.

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

US Airways to cut 1,000 jobs, reduce some routes originally appeared on BloggingStocks on Thu, 29 Oct 2009 10:50:00 EST. Please see our terms for use of feeds.

The skies are starting to look a little friendlier to United Airlines (NASDAQ: UAUA). The airline reported a quarterly loss that was lower than expected. Third quarter traffic was off only 2.9%, but because United used discounts to fill seats, revenue fell 20.3% (to $4.43 billion). The key to a recovery will be getting passengers to shell out for more expensive seats. According to United's president, John Tague, "There's no opportunity here for a full revenue recovery until we get premium cabin pricing back." He doesn't know how long this is going to take, but does say that he's seen progress over the past few months.

Nonetheless, it's important not to confuse "not so bad" with "making money." UAL lost $57 million (39 cents a share) last quarter. If it hadn't had some good news on fuel hedges and accounting issues, the loss would have been 43 cents a share. Again, this is better than analysts polled by Thomson Reuters expected: they were forecasting a loss of 94 cents per share. And, the third quarter loss was much better than last year's $792 million for the third quarter.

But, it all comes down to the bottom line, and a loss is a loss is a loss.

Continue reading UAL has almost good news for third quarter

UAL has almost good news for third quarter originally appeared on BloggingStocks on Wed, 21 Oct 2009 10:00:00 EST. Please see our terms for use of feeds.

If you think all those new airline fees were a temporary measure to help these beleaguered companies through an economic crisis, you're out of your mind. Now that they've had a taste of how much they can make by charging you for an extra bag or a little more leg room, they're hooked. More important, the fees are making up a meaningful portion of airline revenues and profits, so investors aren't likely to be satisfied with a return to normal - well, they can't. Extra fees are the new "normal."

Continue reading Extra airline fees to become the new 'normal'

Extra airline fees to become the new 'normal' originally appeared on BloggingStocks on Fri, 16 Oct 2009 15:40:00 EST. Please see our terms for use of feeds.

Business travelers still aren't coming back to the good seats, despite airlines' best efforts. FareCompare.com reports that many business class tickets to Europe are going to be 33% to 66% cheaper this fall relative to last year. Companies are being careful with their cash - which means stacking people in coach rather than giving them a little leg room on overseas flights. With back-of-the-plane tickets going for a quarter of the price (or less) than their business class equivalents, this isn't exactly shocking.

On Wednesday, Delta's (NYSE: DAL) cheapest NYC-to-London's cheapest roundtrip coach fare was $716 (for an October 23 departure and October 30 return), according to a report in USA Today. To take the same trip in business class, you were looking at a hefty $4,634. So, even though prices are down year-over-year, it doesn't mean that business travelers are being allowed to enjoy the opportunity.

Continue reading Cheaper business class not helping airlines

Cheaper business class not helping airlines originally appeared on BloggingStocks on Fri, 09 Oct 2009 14:30:00 EST. Please see our terms for use of feeds.

Bigger fees are compensating for shorter flight manifests. For the first half of 2009, airlines in the United States have raked in $3.8 billion from cancellation, re-booking, checked bag and other fees. Data from the U.S. Department of Transportation puts this result up from the $2.3 billion airlines generated from these fees in the first half of 2008.

While passengers haven't been thrilled with these additional charges, the airlines have had to compensate for a significant drop in passenger traffic, as the industry copes with the worst travel session since the terror attacks of September 11, 2001.

Continue reading Hefty airline fees making (not enough of) a difference

Hefty airline fees making (not enough of) a difference originally appeared on BloggingStocks on Fri, 25 Sep 2009 09:00:00 EST. Please see our terms for use of feeds.

Higher fuel prices and slipping demand for air travel have prompted a change. The International Air Transport Association revised its forecast of global airline losses for the year from $9 billion to $11 billion. Revenues for the air travel industry are expected to fall 15% to $455 billion worldwide. Passenger traffic is anticipated to fall by 4%, with cargo dropping 14% for the year.

Financially, IATA CEO Giovanni Bisignani says the impact of the financial crisis has been more severe than the terror attacks of eight years ago.

Continue reading IATA revises airline industry losses by $2 billion more

IATA revises airline industry losses by $2 billion more originally appeared on BloggingStocks on Thu, 17 Sep 2009 11:00:00 EST. Please see our terms for use of feeds.

Delta Airlines (NYSE: DAL) is looking to buy a piece of Japan Airlines (OTC: JALSY). The move could give the world's largest airline access to more cities in Japan.

A source close to the talks says that the investment would be several hundred million dollars and would open the door for an alliance between the two that would allow each airline to book passengers on the other's flights.

Continue reading Delta exploring stake in Japan Airlines

Delta exploring stake in Japan Airlines originally appeared on BloggingStocks on Sun, 13 Sep 2009 11:40:00 EST. Please see our terms for use of feeds.

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

August a sluggish month for U.S. airlines originally appeared on BloggingStocks on Sun, 06 Sep 2009 15:10:00 EST. Please see our terms for use of feeds.

Continue reading Boeing downgraded by Barclays Capital

Boeing downgraded by Barclays Capital originally appeared on BloggingStocks on Mon, 27 Jul 2009 09:40:00 EST. Please see our terms for use of feeds.

Earlier this morning, Continental Airlines (NYSE: CAL) announced that it will cut 1,700 jobs, along with raising fees for checking luggage. CAL tagged this news along with its quarterly earnings report, in which it reported a loss of $1.72 per share. In the same quarter a year ago CAL lost a nickel per share. Excluding one-time items, CAL lost $1.36 per share compared to estimates for a loss of $1.35 per share. Quarterly revenue slipped 22.7% to $3.13 billion in the quarter, just shy of the consensus estimate.

Continue reading Continental releases earnings, announces job cuts

Continental releases earnings, announces job cuts originally appeared on BloggingStocks on Tue, 21 Jul 2009 15:30:00 EST. Please see our terms for use of feeds.

Staff cuts are coming for Singapore Airlines (OTC: SINGF) with calendar Q2 "almost certain" to be a money-loser. This won't be a first for the carrier, but it's definitely rare. Since going public in 1985, SINGF has only had one quarterly loss until now. It took the SARS epidemic to put this company into the red for three months, back in 2003. According to four of the five analysts polled, there was little the company could do to avert the situation.

In a respectable move, the staff cuts are following that of the executive team, which has had 10% to 20% sliced from its salaries. An operating loss of $50 million or more for Q2 will cause staff paychecks to fall by at least 2.5%. SINGF is on the hook to cut 25% of the "monthly variable component" (MVC) that's included in staff salaries if the airline's loss pierces the $50 million threshold. MVC disappears in its entirety if the loss passes the $200 million mark. Currently, MVC accounts for only 10% of employees' total compensation.

Employees have already been chipping in to reduce the airline's costs. Pilots, for example, have sacrificed 65% of a day's pay every month, and employees in general are working shorter weeks.

But, this hasn't been enough.

Continue reading Singapore Airlines loss 'almost certain'

Singapore Airlines loss 'almost certain' originally appeared on BloggingStocks on Mon, 20 Jul 2009 10:40:00 EST. Please see our terms for use of feeds.