Reuters: Senate Democrats unveiled their healthcare plan.
Reuters: Hedge fund manage Griffin has rebounded from losses.
Reuters: GM must pay its debt and become profitable before an IPO.
Reuters: Kraft (NYSE:KFT) is still considered the front-runner to buy Cadbury. Read More
Reuters: Thain regrets nothing he did at Merrill Lynch and during its merger with Bank of America (NYSE:BAC).
Reuters: Trump put his support to the bondholders of his casino business.
FT: A Chinese court ruled against Microsoft (NASDAQ:MSFT) in an intellectual property case. Read More
The rumor that US Air (NYSE:LCC) and American (NYSE:AMR) may merge is not so far-fetched today, or that Southwest (NYSE:LUV) might take over JetBlue (NASDAQ:JBLU).
British Air and Iberia, the flag carriers of the two nations whose fleets met at The Battle of Trafalgar, will merge, creating one of the world’s largest airlines. BA shareholders will control 55% of the new company which will have a market value of $7 billion and total sales of nearly $20 billion. It is noteworthy that just earlier this week, BA said it would fire 4,900 people because of a $485 million loss in the six months that ended on September 30. Read More
American Airlines (NYSE:AMR) is competing with Delta (NYSE:DAL) to form a close partnership with financially troubled Japan Air. Both US carriers would like ready access to JAL’s tremendous network of flights around Asia, where air travel is expected to rise rapidly over the next few years.
American got some help in its quest to be JAL’s preferred partner. US private equity firm TPG may be ready to put up several hundred million dollars that could shore up JAL’s faltering financial state. Read More
Signs are pointing to another bailout of Japan Airlines by the Tokyo-based government. That means the carrier could survive without being broken into pieces.
JAL is still prized for its significant and presumably lucrative routes around Asia. That makes it attractive to US carriers who want a large piece of the business in the fastest growing region in the world. Several American airlines have tried to create alliances with JAP only to be stymied by its financial troubles. Read More
The events of 9/11 and the recession have cut sharply in to airline travel. That has been demonstrated by carriers cutting routes and laying off employees. There were a few airline bankruptcies last year. Delta (NYSE:DAL) bought Northwest in a consolidation meant at least partly to cut costs.
One positive by-product of falling passenger activity was few flight delays. That trend is about to come to an abrupt end. Read More
Southwest Air (NYSE:LUV) once again proved why it is the most admired carrier in America. Over 83% of its flights arrived on time in August, the latest month measured by US Department of Transportation.
Northwest, probably still working through an integration with its new owner Delta (NYSE:DAL) posted the worst record for arrivals among big carriers with 74% of its flights getting where they were going. Delta did almost as poorly with a figure below 79%. Read More
Reuters: The pay czar plans to rework employee pay at large banks.
Reuters: Hewlett-Packard (NYSE:HPQ) may enter the tech M&A frenzy.
Reuters: Microsoft (NASDAQ:MSFT) says some Hotmail passwords were exposed.
Reuters: The US called for rigorous IMF surveillance to spot new investment bubbles. Read More
Reuters: The retirement package for Ken Lewis of Bank of America (BAC) may be as high as $125 million.
Reuters: US car sales plunged in September with Ford (F) up and GM down. Toyota (TM) and Honda (HMC) also lost sales.
Reuters: The CIT (CIT) board approved a restructuring plan. Read More
By Robert Herbst of AirlineFinancials.com
American Airlines (AMR) recent announcement made one thing very clear.
–Sorry St Louis, it’s nothing personal it’s just business!–
It doesn’t take a rocket scientist to conclude St Louis (STL) is the big loser in AMR’s
newest business strategy. Picking the winners will be more of a challenge.
Thursday, AMR disclosed the destinations served from St Louis will drop from 39 to
just 9 by next summer. As a side-note, back in 2000, the year prior to AMR’s
acquisition of TWA, there were well over 400 TWA departures to both US
and International destinations. Read More
Reuters: Obama is trying to push Wall St. reform.
Reuters: German aid for Opel will go in part to Russia for operations there.
Reuters: A global poll shows support for stimulus packages.
Reuters: J&J (JNJ) is in talks to cut its $1.5 billion Elan investment. Read More
By Robert Herbst
After losing over $5 billion last year, the airline industry is now on course to lose a similar amount for 2009. This projected loss comes after the airlines will spend over $13 billion less for fuel compared to 2008.
Losing money for the old legacy carriers is nothing new. But this year, even low cost Southwest (LUV), after 35 consecutive years of profits, is expected to lose money. Of significance for how serious the revenue problems are for the industry, Southwest’s load factor will be the highest in the airline’s history.
If you’ve taken a flight or read a newspaper lately, you’re probably aware the airline industry has serious problems from customer service to record financial losses. Read More
Faced with higher fuel prices and falling passenger traffic, the airline industry is ailing. There are concerns that some carriers will go bankrupt if the situation does not improve by the holiday season which usually is a heavy travel period.
The International Air Transport Association is seeing a tiny up-tick in travel trends. Read More
British Airways has announced it will cut its capital spending this year by another 20% to 580 million pounds. It is in the process of negotiating with its unions to significantly reduce jobs. Sharp drops in premium class fliers, a large source of profits, are pressuring the airline financially. Read More
These are the top pre-market analyst upgrades and downgrades we have seen this Thursday. There are going to be fewer and fewer research notes from now to what is most likely Tuesday morning as Friday is a holiday and Monday is being taken off by so many investment and research personnel.
Jon C. Ogg
July 1, 2009
Reuters: The US outlined new financial market reforms.
Reuters: Obama lobbied MDs on his new healthcare package.
Reuters: Russia hosted the first BRIC summit.
Reuters: B of A’s (BAC) BlackRock (BLK) stake is more appealing.
Reuters: Samsung and Nokia (NOK) are pushing into smartphones. (MOT)(AAPL)(RIMM). Read More
Reuters: Baclays (BCS) sold BCI to Blackrock (BLK) for $13.3 billion
Reuters: WHO declared a flu epidemic
Reuters: Congress bash Fed, Treasury, and B of A (BAC) on Merrill
Reuters: US is near tighter control of tobacco by FDA.
Reuters: New research shows mortgage delinquencies have bottomed
Reuters: World Bank sees a steeper global economy contraction. Read More
All of the fuel-hedging, layoffs, capacity and route-cutting the airline industry did last year in an attempt to offset the rising price of fuel has gone for nothing. Delta (DAL) announced today that it would need to make more significant reductions in available seats and the process would cost many more people their jobs.
The first week of May, crude moved around just over $50. Today it traded just above $69, a 38% increase over that period. Airline stocks have reacted badly to the news. No wonder, the International Air Transport Association recently said that the global airline industry would lose $9 billion this year.
Airlines stocks are on their way to becoming what they were a year ago. Read More
Reuters: China must balance growth and reducing greenhouse gases.
Reuters: The Supreme Court has delayed Chrysler’s Chapter 11.
Reuters: The US will allow 10 banks to repay TARP funds.
Reuters: The Boston Globe (NYT) union rejected pay cuts.
Reuters: Auto suppliers are seeking new government aid.
Reuters: The US bailout panel wants more bank stress tests. Read More
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