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Southwest Airlines' legacy of good news
Gosh, it's such a drag reading about business and the economy lately. So, what the heck, let's take a quick look at a perennial source of good news, Clear Thinkers favorite Southwest Airlines. Southwest's discount model of operation has...
Incompetence masquerading as demagoguery
University of Houston finance professor Craig Pirrong (blog here) does a nice job in this Wall $treet Journal op-ed on Friday of explaining how speculation in oil and gas markets helps all of us deal with rising energy prices:...
The instinct against the money-makers
I swear, you can't make this stuff up. As Larry Ribstein cogently explains, Southwest Airlines has taken advantage of futures markets over the past several years to hedge its fuel costs (previous posts on Southwest's hedging program are here)....
Ripples of the Delta-Northwest deal
The merger agreement between Delta Air Lines and Northwest Airlines (they were meant for each other) announced yesterday not only would create the world’s largest carrier if approved, but it has renewed talk (see this W$J article, too) in...
The Southwest Airlines culture
While Continental Airlines continues its speculative merger dance with United Airlines, Southwest Airlines continues to be the most profitable company in the U.S. airline industry. This Jeff Bailey/NY Times article reports on the unique culture of Southwest that makes it...
The Kelleher legacy
Mitch Schnurman asks outgoing Southwest Airlines chairman and former CEO Herb Kelleher how he wants to be remembered: "That I consumed more Wild Turkey and cigarettes than anybody else in the industry," he quipped to reporters last week, after announcing...
Lamar Muse, RIP
Former Houstonian M. Lamar Muse, one of the founders of Southwest Airlines and a pioneer of airline deregulation, died earlier this week in Dallas. He was 86 at the time of death. Muse was legendary in the airline industry for...
This is a compromise on the Wright Amendment?
These previous posts have examined the hopelessly obsolescent Wright Amendment, which protects DFW Airport and its main airline -- American -- from competition that is beneficial to consumers by restricting Southwest Airlines and other discount carriers from flying passengers from...
Checking in on Southwest Airlines
Mitch Schnurman, the Ft. Worth Star-Telegram's business columnist, notes that low-cost airline leader Southwest Airlines is now one of the industry leaders in pilot and flight attendant compensation: Southwest employees are also paid some of the highest salaries in the...
Flying the friendly chapter 11 skies of United
After wallowing over three years in chapter 11, United Airlines parent UAL Corp. finally emerged from bankruptcy this past Friday (previous posts here) amidst the usual wave of optimism that greets such achievements. Recent trading in bankruptcy claims and UAL's...
Ripples from the Wright Amendment compromise
Following on this post from last week regarding this year's compromise over the dubious Wright Amendment, this Fort Worth Star-Telegram article reports that American Airlines will move some of its planes to Love Field to compete with Southwest Airlines' new...
Indulging the Wright Amendment
Well, this year's Congressional machinations over the Wright Amendment are over and the outcome is about as satisfying as one of those hard-fought football games that used to end in a tie before the era of overtime. Rather than simply...
Southwest, you're welcome here
This NY Sunday Times article provides a good overview of the challenges that Southwest Airlines faces in the rough and tumble airline business as its fuel hedging strategy (noted in earlier posts here and here) fades and it faces the...
Delta and Northwest tank
As anticipated here earlier this week, Delta Air Lines commenced its inevitable chapter 11 reorganization case yesterday and was joined by fellow legacy carrier Northwest Airlines. Both chapter 11 cases were filed in New York City, which has become the...
George Will on the Wright Amendment
Washington Post columnist George F. Will adds this column to the growing body of opinion that the Wright Amendment -- which restricts Southwest Airlines from flying to most states from its Dallas Love Field hub -- is at least obsolescent...
Crandall on the Wright Amendment
Before retiring in 1998, former American Airlines chairman and CEO Robert Crandall steered American successfully through the first two decades after deregulation of the American airline industry. Mr. Crandall was viewed as a hard-knuckled but successful executive during his tenure...
U.S. Airways to marry America West?
The airline business is all atwitter today with the news that US Airways, which has been wallowing in a chapter 22 (i.e., it's second chapter 11 case) since September of last year, is considering a merger with America West to...
Southwest Airlines continues to roll
On a day in which the stock market was hammered generally, Dallas-based Southwest Airlines savvy use of fuel hedges allowed it to offset high fuel costs and nearly triple its profit to $76 million in the first quarter. Southwest's net...
Continental reiterates pessimistic earnings forecast
Houston-based Continental Airlines reiterated this earlier warning by announcing in this Form 8K filing that it is forecasting continued "significant" losses for 2005, but projecting cash flows and reserves are sufficient to carry it through the year so long as...
Continental reports big revenue decrease
The airline industry just continues to reel. Yesterday, Houston-based Continental Airlines announced that competition from Delta Air Lines's recent broad-based fare cuts is the primary factor behind a revenue decrease that will be at least $50 million more than it...
Except Southwest, airlines continue to reel
Several major airlines reported quarterly earnings yesterday, and the reports continue to verify what everyone already knows -- the legacy airline business model is broken and in need of such serious reorganization that it is questionable whether many can or...
Markets finally working in the airline industry
Dallas-based Southwest Airlines Co. announced Wednesday that start service to Pittsburgh International Airport in May. Southwest's move comes on the heels of US Airways Group's disastrous performance over the holiday season and the troubled airline's service cuts at the airport....
Was there really any doubt about who would win?
Following on this earlier post regarding Dallas-based Southwest Airlines' effort to expand its operations at Chicago's Midway Airport, Southwest won the auction of bankrupt airline ATA's Holding Corp.'s Midway assets yesterday....
Southwest Airlines attempts to expand Chicago operation
You gotta love Southwest Airlines, Inc. While most of the legacy airlines are trying to figure out either how to avoid bankruptcy or find financing to exit bankruptcy, Dallas-based Southwest just continues to execute its methodical business plan of expanding...
Continental requests employee concessions
Houston-based Continental Airlines -- one of the city's largest employers -- announced Thursday that it is asking employees for reductions in pay and benefits effective Feb. 28 of next year as a part of a plan to reduce its annual...
The Wrong Amendment
After years of remaining neutral on the Wright Amendment -- that law that restricts flights from Dallas's Love Field Airport -- Southwest Airlines is now calling the rule "anticompetitive" and "outdated". It's about time. The Wright Amendment was enacted in...
Continental posts big 3rd quarter loss
Houston-based Continental Airlines reported a net loss for the third quarter on Tuesday as high fuel prices and competition from low-cost carriers continued to savage the "legacy carrier" segment of the airline industry. In announcing the loss, the fifth-largest U.S....
Analyzing airline woes
The Wall Street Journal's Holman Jenkins, Jr.'s Business World ($) column today addresses the mess that is the American airline industry, and notes that this is not a problem that has just arisen recently: Today's crisis is not materially different...
Southwest Airlines CEO resigns
James F. Parker, Dallas-based Southwest Airlines' CEO, unexpectedly resigned yesterday after just three years. The publicly stated reason for the resignation was the ubiquitous "personal reasons," such as the "draining" nature of the job. Airline CEO's are becoming as disposable...
United revises bid for federal financing
As noted in this earlier post, the federal Air Transportation Stabilization Board announced last week that it had rejected Chicago-based United Airlines' application for a $1.6 billion federal loan guarantee, which was the foundation of United's reorganization plan to emerge...
More on hedging fuel costs
Following on this Professor Ribstein post and this reply post here over the weekend regarding most airlines' failure to hedge fuel costs, this NY Times article reports that the hedging of fuel costs also varies widely in other fuel intensive...
Why don't airlines hedge fuel costs?
The always perceptive Professor Ribstein over at Ideablog asks this question: Given the volatility or oil prices and the adverse impact of high prices on the business of running an airline, why don't airlines hedge their fuel costs? The answer:...
Continental and Southwest Airlines release quarterly earnings reports
Houston-based Continental Airlines narrowed its first-quarter loss, and Dallas-based Southwest Airlines scratched out a small profit as both airlines struggled with higher fuel prices. Continental, the nation's fifth-largest airline in terms of traffic, had a net loss of $124 million...
Yeah, but do they have rubber chicken?
This NY Times article relates some airline industry executives' frustration with the glowing media reports that low-budget airlines such as Southwest Airlines and JetBlue have been receiving recently. The article is a good summary of where the airline industry stands...
Southwest Airlines facing low-cost competition
This NY Times article describes the increased competition that Dallas-based Southwest Airlines is facing from other low-cost airlines and the steps that Southwest is contemplating to combat that competition. A word to wise investors in airline stocks: Don't bet against...
Southwest Airlines takes Philly by storm
One of Texas' great business success stories--Southwest Airlines--is causing heartburn to U.S. Airways in the Philadelphia market with Southwest's tried and true formula of low fares and prompt service....
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