Analyst Michael Derchin of FTN Midwest Securities lowered his first-quarter revenue forecast for the major airlines this morning, citing the commentary from the past two weeks of earnings conference calls.
"It is evident from management commentaries that the first quarter RASM outlook is shaping up worse than we had forecast only a week ago. It appears that bookings fell off dramatically beginning the second week of January and the advanced book load factor is particularly weak for international services."
Derchin still believes that the airline industry will be profitable this year despite the recession because of lower fuel prices, capacity cuts, new passenger fees and revenue from cargo shipping.
A new passenger-rights group emerged Thursday, calling itself the Association for Airline Passenger Rights. It was almost immediately attacked - not by an airline, but by another passenger advocacy group. Keep reading for all the juicy details.
Mechanics at Southwest Airlines have ratified a new contract by a wide margin, according to the Aircraft Mechanics Fraternal Association. Nearly 61 percent of union members voted to accept the deal, with 39 percent voting against it. The agreement is scheduled to be signed next week in Dallas.
According to the union, the deal includes wage increases that total 17 percent over the next four years, through a 10 percent raise in base pay and 7 percent in bonuses. It also restricts the airline from outsourcing more than four maintenance lines overseas. Southwest currently has unlimited ability to send work outside of the United States.
The deal also includes job security provisions and other benefits.
American has extended a special offer that rewards a free "companion" ticket to customers who fly round-trip from the U.S. to the U.K. The free fare is good for travel to locations in the U.K. and the Caribbean.
The offer is good through March 31, and it's awarded to passengers who fly on first, business or "select" coach fares. More information is available here.
Remember those "MILF" ads that Spirit Airlines was running in 2007, and they swore they had no idea what the acronym stood for? (The airline claimed it meant "many islands, low fare.") Well they're still around, as well as another sexually suggestive ad, and the airline's flight attendants are getting annoyed.
Here's what the Associated Press had to say:
MIAMI — Flight attendants and pilots for Spirit Airlines Inc. want the company to pull a series of sexually suggestive advertisements, along with a new requirement they wear a patch advertising Bud Light on service aprons.
Patricia A. Friend, head of the Association of Flight Attendants-CWA, complained in a letter to Spirit executives this month. When the airline refused to change the ad campaigns and the aprons were handed out Monday, the union issued a public statement Tuesday.
"I feel as though I have entered a time warp and am reliving the battles for respect and justice for women that we fought for 40 years ago," Friend said.
Some of Spirit's ads invite customers to enjoy its DD's [deep discounts] and "MILF" [many islands, low fare] specials — double entendres also referring to large breasts and a crude acronym popularized in the 1999 movie "American Pie" that describes an attractive mother.
Spirit pilots announced their support Wednesday.
The airline has also used other saucy ad campaigns in the past, including "Threesome Sales" and a "Cheap and Easy and Nothing to Hide" promotion. And when it re-launched the MILF campaign last year, the airline's ad touted that "the MILF sale has returned by popular demand, and it's hotter and cheaper than ever."
Airline industry losses continue to mount, with Continental Airlines reporting a $266 million loss for the fourth quarter, and JetBlue Airways posting a $49 million loss. For the full year, Continental was $585 million in the red, while JetBlue bled $76 million.
For those keeping track, fourth-quarter losses now total $4.1 billion for the nine major airlines that have reported earnings (that's AMR, Southwest, U.S. Airways, Alaska, Frontier, Delta, United, Continental, AirTran and JetBlue).
Jeff Brundage, who oversees human resources at American Airlines, opines today in his blog about federal mediators taking over all nine of AA's outstanding labor contracts. He writes that:
"In our case, we joined the requests for mediation with the three unions that represent AA employees only after union leaders made the decision to do so. We are committed participants. But we recognize that mediation is no panacea. It doesn’t guarantee an outcome better for either side than might have been achieved otherwise. In fact, mediation impacts both sides:
"With a mediator on board, each side has less control over the process. The NMB decides the agenda and determines the timeline. That means that the schedule must take into account the availability of not two parties but three. Historically, mediated negotiations in the airline industry last an average of 15 months after the mediator comes on board."
He adds, more hopefully, that "mediation promotes realism on the part of both sides" and could help promote good-faith bargaining.