Tag - Airlines

The airline industry has been among the hardest hit by spiraling oil prices, as carriers scramble to make ends meet by raising fares and levying special fees on passengers. The recent retreat of oil prices has prompted a corresponding rebound in airline stocks, and has helped support small-cap stocks in general.

Hawaiian Holdings, Inc. (Nasdaq:HA), which owns Hawaiian Airlines, stands to gain from both these trends, plus it has some silver lining of its own in the clouds over the airline industry.

At the beginning of the second quarter, Hawaiian Airlines saw its two main competitors, Aloha Airlines and ATA Airlines, both cease operations, more or less from one day to the next. Aloha had 40% of Hawaii’s inter-island traffic and Aloha and ATA together close to 20% of the traffic with the U.S. west coast.

Then at the end of April, a third competitor, Mesa Air Group (Nasdaq:MESA), ended some acrimonious litigation with Hawaiian, agreeing to pay $52.5 million to settle Hawaiian’s claims that Mesa had used confidential passenger information – obtained when it looked into investing in Hawaiian during bankruptcy proceedings – to launch its own Hawaiian business in 2006. (It didn’t help Mesa’s case when it came out that its chief financial officer had solicited information from an acquaintance about how to delete e-mails permanently from the hard drive...

ExpressJet Holdings, Inc. (NYSE: XJT) CEO James Ream the company is “pleased” with the quantity and quality of bookings during March. Ream made the comments during a morning conference call.

Before the opening, ExpressJet reported an adjusted fourth-quarter loss of $27.6 million, or $0.52 per share, down from adjusted earnings of $22.8 million, or $0.39 per share, a year earlier. Wall Street analysts, on average, predicted a loss of $0.31 per share.

The chief executive said the air carrier was negatively affected by a lack of functionality on its online booking system during the heavy travel periods of the fourth quarter. He said the Houston-based firm fixed the functionality and the firm’s market share has begun to improve.

Higher fuel costs, a strategy of flying airplanes under its own brand name and a reduction in passenger capacity in a contract with Continental Airlines, Inc. hurt earnings for the three-month period ended Dec. 31. Houston-based ExpressJet formerly operated as a subsidiary of Continental, flying under the Continental name to smaller cities. ExpressJet was spun out of Continental in 2002 and began flights between regional airports under its own brand name.

Mesa Air Group, Inc. (OTC: MESA) shares are sliding after the Phoenix, Ariz.-based company delayed its fourth-quarter and full-year earnings statement until Jan. 15. In fiscal 2006, the operator of regional air carriers earned $34 million, or $0.84 per share.

Reporting a business sale is taking longer than expected, according to the company. Mesa sold Air Midwest Inc. on the last day of its fourth quarter, Sept. 30, and the firm said this timing has caused a delay.

The firm expects to post a loss for the fourth quarter and for the full fiscal year. Mesa recorded losses during the first three quarters of fiscal 2007.

The company canceled its conference call, originally scheduled for 11 a.m. ET on Friday morning and anticipates announcing the new date next week.

In afternoon trading, MESA shares are down 4.71%, or $0.16, at $3.24. Over the last 52 weeks, shares have ranged from $3.10 to $8.82.

The airlines industry has suffered extreme turbulence since 9/11, from which it has not recovered. Toss in the rapidly rising fuel costs since the 2005 Gulf Coast hurricanes, and you have a double whammy smackdown that has brought many major carriers a trip through bankruptcy.
 
Frontier Airlines Holdings Inc. (Nasdaq: FRNT) and other smaller, regional carriers have fared better. But even with marketing tools such as 50 images of wildlife like grizzly bears, hares and wood ducks gracing the tails of its aircraft and the catchy slogan, “A whole different animal,” Frontier is having a bear of a time in keeping analysts from lumping it indiscriminately with some of its more troubled peers.
 
There are some changes in the air for Denver-based Frontier, however. CEO and President Jeff Potter announced last Thursday that he was resigning, effective September 6, to take another chief executive position outside of the airline industry. The next day Frontier's stock rose nearly 4% to $5.22, lifting the price from the $5.00 52-week low earlier in the week. A few days before that, Sam Addoms, company chairman and co-founder, said he planned to retire at the same time, when Frontier holds its annual shareholders’ meeting. Potter, 47, who rose through the ranks at Frontier, will remain on the company’s board.

Analysts had a neutral to negative view of Frontier before it reported results on July 26 for the quarter ended June 30, the first period in its fiscal 2008 year, and it doesn’t appear as if that report swayed their opinion. The company posted a net loss of $3.5 million, or $0.10 a share, compared with a profit of $4 million, or $0.10 a share, in the same quarter a year earlier. Still, sales grew 13% to $344.8 million.
 
Maybe industry observers need to lighten up, because Frontier is – lightening up, that is. As fuel costs continue to rise, seemingly without a pause, Frontier is in the midst of swapping out the seats in its youthful fleet of Airbus jets with a lighter variety. The company estimates that it can save $5.4 million a year in fuel costs with the switch – and it’s going to be able to add four seats to each plane. Of course, there’s a capital expenditure for the project, which cost it $1.4 million in the quarter in accelerated depreciation costs.