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wgrsh 69 posts  |  Last Activity: Jul 9, 2014 4:57 PM Member since: May 11, 2005
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  • Reply to

    ual up over 2 dollars after hours

    by fredd008 Jul 9, 2014 4:49 PM
    wgrsh wgrsh Jul 9, 2014 4:57 PM Flag

    Good show on monthly report, UAL

  • Reply to

    Fuel hedges

    by roc10102011 Jul 9, 2014 12:35 PM
    wgrsh wgrsh Jul 9, 2014 4:28 PM Flag

    I really don't know all the specifics, but if the hedges held recently were from 2009 and in the money ... wouldn't their peak value (complicated because of the theta) be when oil was higher a few years ago?

    I find it generally hard to believe that many made money hedging with hedges purchased in the past few (number of) years.

    Fundamentals are calling for lower fuel absent geopolitical events, and as I mentioned off and on, the CFTC is coming out with position limits and limits that aggregate positions over out months/years ... we'll see how watered down that is with exemptions, etc. Commodities are uncoupling from all correlations so something is going on.

  • Reply to

    Fuel hedges

    by roc10102011 Jul 9, 2014 12:35 PM
    wgrsh wgrsh Jul 9, 2014 3:02 PM Flag

    I can see how the hedges were in the money since they were from 2009 ... I didn't have the specifics ... dump the future ones before they go down in value if fuel drops ... (maybe they sold during the last pop in fuel)

  • Reply to

    Fuel hedges

    by roc10102011 Jul 9, 2014 12:35 PM
    wgrsh wgrsh Jul 9, 2014 1:52 PM Flag

    It sounds like AAL is dumping all their hedges even the ones out in the future, but I don't have the specifics ... instead of taking smaller losses every quarter, they are taking all the losses this quarter ... which is wise if fuel continues to drop ... Guess they want to stop the bleeding of the hedges.

  • Reply to

    AAL gives bullish investor update

    by airlineprofessor Jul 9, 2014 8:31 AM
    wgrsh wgrsh Jul 9, 2014 10:37 AM Flag

    I don't know if you listened to the June webcast, but I think Parker threw out a bigger synergy number (I may have misunderstood the synergy expectation). I thought synergies were expected to be around $1 billion, but he clearly said he expects $1 billion in revenue synergies and $500 million in cost synergies. The difference between $1 billion and $1.5 billion is material. (I always thought Parker expected about $1.2+ billion with the analysts saying closer to $1 billion)

  • Reply to

    Heating oil almost down 4 cent just today

    by wgrsh Jul 8, 2014 2:12 PM
    wgrsh wgrsh Jul 8, 2014 4:00 PM Flag

    It is funny. When Baldanza was talking, I was waiting for him to say something like that, but he opted to pump his fuel efficient fleet ... can't blame him, and probably more appropriate.

  • Heating oil has fallen to almost 287 ... that has to put jet fuel near the low for the year.

  • Reply to

    Parker sees strong demand, no "pockets of weakness"

    by iahphx Jul 8, 2014 12:21 PM
    wgrsh wgrsh Jul 8, 2014 12:56 PM Flag

    You bring up an interesting point ... This is the first year of AAL ... are they chipping at other carriers in a way they didn't expect? Then again it may just be that they are seeing strength relative to AMR and LCC operating separately and not taking anything out of other carriers. Anyway, I hope the article you cited is true.

    And ignoring all of the above, I thought DAL expressed that they held to their quarter projections, and at least to the strength going forward.

  • Reply to

    My view-addendum

    by airlineprofessor Jul 8, 2014 11:58 AM
    wgrsh wgrsh Jul 8, 2014 12:09 PM Flag

    I agree ... LCC use to report monthly figures on the 3rd business day of the month, but Parker said in January that AAL would do it on the 9th going forward.

  • Reply to

    Hmmm. Ual -$.98, AAL -$2.01

    by institutional_airline_trader Jul 8, 2014 10:43 AM
    wgrsh wgrsh Jul 8, 2014 11:55 AM Flag

    I can see that ... the story isn't over.

    (some airlines may be turning green soon)

  • Reply to

    Hmmm. Ual -$.98, AAL -$2.01

    by institutional_airline_trader Jul 8, 2014 10:43 AM
    wgrsh wgrsh Jul 8, 2014 11:38 AM Flag

    It's hard to pick the time frame for UAL to catch up to the rest of the industry. They have a substantial cost cutting plan ... if they can do it, they should make the same margins as DAL and AAL (making $4.0 billion - $4.5 billion ... divide that by their shares outstanding). But "when" is the question.

    I agree with those that say this sell off is getting long in the tooth. There has been a lot of volume on the gap down.

    Jet fuel is back down ... guess we wait for the monthly numbers and earnings and see how it goes.

    (The CFTC extended the comment period on establishing energy, ag and metal position limits and aggregation rules until Aug 4th ... lots of push back from those on the financialization side ... hopefully, this further delay (after 5+ years) is to get it right instead of giving in to "watering down" the new rules.)

  • Reply to

    My view

    by airlineprofessor Jul 3, 2014 9:24 AM
    wgrsh wgrsh Jul 5, 2014 11:14 AM Flag

    andevenabs ... from your post last Thursday ... you have to be careful comparing DAL's PE and AAL's. Even though DAL doesn't pay taxes, they have to report earnings on an after tax basis. The PE's for both are essentially the same on an apples to apples basis.

  • Reply to

    AAL is an investment NOT a day trade !

    by melodias23 Jun 25, 2014 3:57 PM
    wgrsh wgrsh Jun 25, 2014 4:16 PM Flag

    I use to take comfort in the fact that the airlines could make good money with a slow growing economy of 2%. And here Q1 GDP was negative and the airlines made good money ... got to love it. Wait 'til the US and then world economies start humming ... the story is still intact.

  • Reply to

    Old inclinations take time to be changed

    by airlineprofessor Jun 25, 2014 11:27 AM
    wgrsh wgrsh Jun 25, 2014 11:59 AM Flag

    I agree, the business model has changed ... it had to ... balance sheets were bleeding. By Q1 2010 all but LUV were on board, and LUV followed about a year later (ex jblu ... but they may see the benefits eventually). And I agree what you say about Parker. Besides managing the companies well, I give him credit for preaching capacity discipline in 2009 and being an industry leader.

  • Reply to

    Don't be fooled

    by airlineprofessor Jun 23, 2014 9:56 AM
    wgrsh wgrsh Jun 25, 2014 10:23 AM Flag

    I understand what you're saying. I noticed that the "average" revenue estimate only went up .7% after AAL moved it a full percent. I don't have last year's prasm number without a history of a combined company, so I have to go with the "average" estimate for revenue. Anyway, revenue shouldn't disappoint, so I understand the potential for a beat of your number, if fuel is that good for them.

  • Reply to

    Don't be fooled

    by airlineprofessor Jun 23, 2014 9:56 AM
    wgrsh wgrsh Jun 25, 2014 9:52 AM Flag

    Thanks ... I can use "insignificant". I knew LCC had it in their contract, but noticed only $6 million in Q1 (which was much lower than what LCC's would have been ... I just don't know the new labor contracts, and how they evolve over time.)

    It's going to hard for AAL not to match or beat if costs and revenues are at their midpoint of guidance or better.

  • Reply to

    Don't be fooled

    by airlineprofessor Jun 23, 2014 9:56 AM
    wgrsh wgrsh Jun 24, 2014 10:35 PM Flag

    airlineprof ... using your fuel and revenue number, I can get within a few cents of your $1.89 ... so all is good there (but that has a +/- range as you know given the casm/prasm ranges). But my main question still relates to profit sharing. Is there significant profit sharing this year? Any others on the board have an idea?

    In their initial guidance in January they mentioned in their 8-K casm guidance that casm excluded fuel, special items and profit sharing, but then dropped the wording, "profit sharing" in the April 24th 8-K guidance only saying that it excluded fuel and special items. I'd appreciate any insights from anyone.

  • Reply to

    Don't be fooled

    by airlineprofessor Jun 23, 2014 9:56 AM
    wgrsh wgrsh Jun 23, 2014 5:17 PM Flag

    AAL's cost guidance release April 24th didn't mention anything about profit sharing (That I saw). The guidance is pretty much in the same format as what LCC released, and LCC always broke out profit sharing separately, and not part of CASM. So, the question ... Is there profit sharing, and if so, how much is it and how is it being accounted for in the guidance.

    CASM was the same in April as in the June 9th comment. Another question ... is there a newer 8-K guidance than the April 24th guidance?

  • Reply to

    Higher Oil? No worries!

    by stocknup101 Jun 19, 2014 8:55 AM
    wgrsh wgrsh Jun 19, 2014 12:03 PM Flag

    ... they have a hedge on fuel, Right? ...

    Sure, but only a percentage is hedged, and hedges at a given price are only "relatively" short term. Airlines, as with any industry with "on going concern" thinking need to set prices/fares to cover costs without depending on tweaks such as hedging. So, in my mind, doing that as soon as possible would really show that the industry is behaving maturely ... hedges will run out. (And the investing world would love to see that industry discipline.)

  • Reply to

    Fare increase

    by wgrsh Jun 18, 2014 1:08 PM
    wgrsh wgrsh Jun 18, 2014 4:58 PM Flag

    True, jet fuel has been in a reasonable stable range for quite a while. But the prices are at the top end of that range if not at new highs. If the price movements of the last week hold, or keep going, I'd like to see a fare hike.

    Has anyone here run the numbers for Q2 based on AAL's cost guidance?

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