UPDATE 5 - September Airline Results Extravaganza

Here's a quick summary on all the airline results that I have seen so far:

AirTran
Sept RPM=950 Million (+11.6%) Load Factor=61.8 % (-9.4) ASM=1.5 Billion (+28.6%)
YTD RPM=10.4 Billion (+24.7%) Load Factor=74.1 % (-.2) ASM=14.0 Billion (+25.0%)

Alaska
Sept RPM=1.4 Billion (+5.9%) Load Factor=73.6% (+1.2) ASM=1.9 Billion (+4.2%)
YTD RPM=13.6 Billion (+6.0%) Load Factor=77.5% (+.9) ASM=17.5 Billion (+4.7%)

American (without American Eagle)
Sept RPM=10.6 Billion (-1.4%) Load Factor=75.5% (-.7) ASM=14.0 Billion (-.5%)
YTD RPM=106.2 Billion (+1.1%) Load Factor=80.5% (+1.8) ASM=131.8 Billion (-1.1%)

ATA (Scheduled Service)
Sept RPM=299.0 Million (-37.6%) Load Factor=74.5 % (+3.6) ASM=400.0 Million (-40.6%)
YTD RPM=3.1 Billion (-43.4%) Load Factor=80.0 % (+10.2) ASM=3.8 Billion (-50.6%)

Continental (Mainline and Regional)
Sept RPM=6.9 Billion (+11.5%) Load Factor=78.6% (+1.2) ASM=8.8 Billion (+9.9%)
YTD RPM=67.7 Billion (12.6%) Load Factor=81.0% (+1.7) ASM=83.6 Billion (+10.2%)

Delta
Sept RPM=9.1 Billion (-3.4%) Load Factor=74.6% (+1.5) ASM=12.2 Billion (-5.4%)
YTD RPM=88.2 Billion (-4.5%) Load Factor=78.8% (+1.5) ASM=112.0 Billion (-6.2%)

Frontier
Sept RPM=616.5 Million (+11.3%) Load Factor=67.6% (-3.4) ASM=911.6 Million (+17.0%)
YTD RPM=6.4 Billion (+17.7%) Load Factor=77.8% (+1.4) ASM=8.2 Billion (+15.7%)

Hawaiian
Sept RPM=548.8 Million (-4.0%) Load Factor=83.1% (-6.0) ASM=660.3 Million (+2.9%)
YTD RPM=5.1 Billion (+2.1%) Load Factor=86.8% (+0.1) ASM=5.9 Billion (+2.0%)

JetBlue
Sept RPM=1.6 Billion (+8.2%) Load Factor=72.6% (-5.1) ASM=2.3 Billion (+15.8%)
YTD RPM=17.5 Billion (+16.5%) Load Factor=78.8% (+1.5) ASM=21.3 Billion (+22.9%)

Northwest
Sept RPM=6.2 Billion (-5.5%) Load Factor=81.3% (+1.3) ASM=7.6 Billion (-7.1%)
YTD RPM=59.1 Billion (-6.5%) Load Factor=84.7% (+3.0) ASM=69.8 Billion (-9.8%)

Republic
Sept RPM=534,827(+49.0%) Load Factor=66.9% (+1.9) ASM=799,018(+44.7%)
YTD RPM=1.8 Million (+56.8%) Load Factor=72.9% (+4.7) ASM=2.5 Million (+46.5%)

Spirit
Sept RPM=299.0 Million (+15.0%) Load Factor=70.0% (-2.4) ASM=427.0 Million (+18.8%)
YTD RPM=3.4 Billion (-4.0%) Load Factor=72.4% (-1.0) ASM=4.3 Billion (-2.7%)

Southwest (System)
Sept RPM=5.2 Billion (+9.8%) Load Factor=67.2%(-.2) ASM=7.7 Billion (+10.1%)
YTD RPM=50.9 Billion (+12.9%) Load Factor=74.0% (+2.9) ASM=68.7 Billion (+8.4%)

United (System)
Sept RPM=9.3 Billion (+1.3%) Load Factor=79.5%(-.7) ASM=11.6 Billion (+2.3%)
YTD RPM=89.0 Billion (+3.5%) Load Factor=82.8% (+.9) ASM=107.6 Billion (+2.3%)

US Airways (Combined US Airways, America West and Regional)
Sept RPM=4.8 Billion (-4.8%) Load Factor=72.2 % (-.5) ASM=6.6 Billion (-4.2%)
YTD RPM=48.1 Billion (-6.8%) Load Factor=78.8 % (+2.1) ASM=61.1 Billion (-9.3%)

Update 1 - Added JetBlue
Update 2 - Added Frontier and Spirit
Update 3 - Added Southwest and alphabetized
Update 4 - Added Northwest
Update 5 - Added Hawaiian

United Says No Fair to JetBlue in O'Hare

JetBlue has publicly coveted service to Chicago for quite a while so yesterday's announcement that it is has formally requested landing rights at Chicago O'Hare (ORD) comes as no surprise. However, this unabashed attempt to step into the backyard of two of the biggest airlines in the US, United Airline and American Airlines, did not go unnoticed. United has quickly flown the protest flag but not for anything related to business or congestion at O'Hare. Instead, United appears to be arguing on a technicality by stating:

"JetBlue must operate in accordance with the regulatory rules of the road, just as all other carriers must do. Because its current request ignores those rules, it must be denied,"

While that may be true it is, at best, a delaying tactic. If the FAA sides with United then its only a matter of time until JetBlue refiles the right way. So what will the United's next protest be? JetBlue's colors clash with the ticket counters in the terminal? Okay that's kinda unfair and over-simplistic but still...

International Routes are all the Rage

I have posted several times that the trend will be for legacy carrier in the US to build their international routes. Seriously, I said it here, here and even way back here and here. Why? First, they don't have much in the way of competition from low cost carriers. They are competing with other legacy carriers so the playing field is mostly level. Second, international routes have a better profit margin right now when compared to domestic routes where they face intense competition from low cost carriers.

China is one of the big battle grounds for international expansion. Not surprisingly the list of competitors is exclusively made up of legacy carriers. Northwest Airlines, American Airlines, Continental Airlines and United Airlines are all making their cases to the government (and the public) on why they should be chosen for new China routes that are will be awarded. The Cranky Flier has a really nice summary of how this competition is lining up and who may have an advantage. Go check it out.

When is Cheap Fuel Bad News?

After months of moaning about fuel prices every airline should be turning cart-wheels as fuel prices dip. Oddly enough, if you're American Airlines, United Airlines or Continental Airlines those lower fuel prices are not great news because you hedged on fuel last quarter at costs that are actually higher than current. Reuters has a good article that lays it out nicely. In summary, the oil companies are thanking these airlines for pre-buying a bunch of fuel at peak prices. So the benefit of this respite in fuel prices is somewhat muted for American, United and Continental. I was surprised to see Continental got caught in this gamble. Continental has stated in the past that they simply do not hedge on fuel. Smackdown quote goes to CreditSights airline analyst Roger King, "It was a complete blank-out on the basics of business management, Business school 101 says you have to hedge uncontrollable costs." Yeah...what he said.

NEWS: Fine...Let's Talk About United and Continental

Everybody's buzzing about rumors of a merger between United Airlines and Continental Airlines so I will weigh in too. Simply put, I think its a bad idea for Continental. Yes, in terms of routing structure the two airline look complimentary. But I think United would simply be a burden on Continental. United still brings a load of problems despite their supposed recovery. Continental on the other hand is managing fairly nicely on their own. One has to admit that United's international routes are a tempting target. I just think those international routes come with too much baggage attached.

One other note. Naysayers to the merger rumors also point out the difficulties of trying to combine unions and its true this can sap the energy in an organization. But America West and US Airways are showing that it is possible and perhaps even a little easier given the increased leverage airlines have in negotiating with the unions.

OPINION: United Airlines CEO and Foreign Ownership

United Airlines CEO Glenn Tilton has stated more than once (and as recently as yesterday) that the US needs to loosen up on foreign ownership rules for airlines. He goes on about how US airlines have "stood on the sideline" as international alliance formed left and right. He is worried, nay..."alarmed", that the US is not leading this charge. But I'm not here to talk about his quotes and noble concerns about the industry...I'm here to stir the pot with a lot of conjecture and speculation. Why is Mr. Tilton so vocal about foreign ownership laws? Think exit funding, Virgin America and Richard Branson and you'll have a hint of what I'm on about.

Reason 1: United needs money.
United needs cash to fund its exit from bankruptcy and my guess is they are having trouble finding this stateside. What leads me to say that? Hmmmm...maybe its the 3 years in bankruptcy and the continual exclusivity period extensions.

Reason 2: United is looking to merge globally
I've said before that CEO's normally don't make public statements without an agenda. Is it possible that United already has some ideas about who a possible suitor could be? I'll offer up the possibility of Virgin America, the start up airline struggling to start up backed by none other than Mr. Deep Pockets Richard Branson. (A) Branson has lots of money (B) Branson is struggling to find enough US funding to start a US airline because ironically he can't use his own money because of foreign ownership laws in the US!! Is he looking for a loophole via a merger with United?

NEWS: United Airlines Flight Attendants Approve Deal

United Airlines announced today that their flight attendants have approved their tentative contract. The deal includes wage reductions of 9.5% which should come out to around $131 million in annual savings. The approval margin of 56% was far slimmer than the pilots who approved their new deal by a margin of 75%. It makes one wonder if everyone at United really understands the severity of the situation. This contract, like all of the ratified contracts to date, must be approved by the bankruptcy court before going into effect. The court has made it clear that they will not review and approve any of the new union deals until ALL of them are ratified. So we all have to wait to see what comes of the tenuous situation between the mechanic's union, the airline and the bankruptcy court before we can move on to the next chapter of this soap opera. Twenty six months in bankruptcy and still counting...sigh.