Tag: airlines

“Comply with all crew member instructions” and then some

FACTS: People all over will travel all over this holiday season. They will stuff themselves with holiday joy. They will feign appreciation for useless gifts. They will complain about service, especially that purveyed by airlines.

This is but a public service message reminding everyone to comply with all crew member instructions, as well as those printed on the wing of the plane …

do not step out of this area


MG signing off (’cause that next one is a doosie)

Airlines have nobody to blame but themselves

Southwest AirlinesIn the midst of oil-mania, Southwest significantly hedged their fuel consumption. Delta and American did not.

Guess who’s winning?

This is a management problem. Hedging is NOT speculation – you shouldn’t “lose” because you hedge, as the cost of fuel should wind up fixed if the hedge is managed appropriately. You determine your need for fuel, and figure out how that flows through to ticket price. Then you purchase forward contracts for that fuel and fix your ticket price appropriately. If fuel prices go up you take your gains on the contracts, which in turn offset your rising costs at consumption time. If fuel prices go down, you lose on the contracts but your fuel price has fallen as you’re buying it. Margin on your service stays the same, as you set your prices in advance.

Not hedging your fuel costs in this environment is the real speculation. And I’ll add that those who do cover their butts have the addition perk of being able to raise their ticket prices (even if slightly) on the back’s of their competitors’ misfortune without significantly effecting volume.

UPDATE: Forbes says: “The sky may not be falling for airlines just yet, but darker clouds could be just around the corner.”

Agreed (particularly if they don’t update their financial management tools to at least late 20th century levels).

UPDATE 2: Southwest turns its 69th consecutive profitable quarter.

Symantec wants to fly high financially

Of course, so does every other company, but in this case Symantec is taking it literally. They’ve hired the CFO of American Airlines, Mr. James Beer.

I am sure Symantec has “high hopes” for Mr. Beer, but I don’t get the move. Pulling an executive out of an industry (and a company) with vast problems of its own isn’t exactly my idea of chasing success with success. Symantec’s President recently and quietly resigned, and the company has lingering problems that shouldn’t be there in the face of a burgeoning market for security products.

I have to wonder…is this move one to get someone on the team that is familiar with bankruptcy-related causes? Because executives in the airline industry know bankruptcy well.