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Aviation Industry Updates: April 12, 2022

By April 12, 2022April 19th, 2022Industry News

Why Buying Spirit Is Bad for JetBlue

  • Wall Street isn’t feeling JetBlue’s (JBLU) surprise bid for low-cost fare rival Spirit Airlines (SAVE).

  • “In the near- to medium-term, we view this as a negative for JetBlue. It is a much tougher merger to execute than the proposed Frontier-Spirit merger with greater dis-synergies primarily related to labor costs but also due to greater investments related to changing cabin layouts,” said Raymond James analyst Savanthi Syth in a research note on Wednesday. “While leverage levels appear manageable, the increase is likely to weigh on investor sentiment. We admit, we did not see this coming.”
  • JetBlue offered to buy Spirit for $3.6 billion late on Tuesday, or $33 a share. The bid counters one from Frontier in February, which put forth a $25 a share bid.
  • “Unlike the compelling Spirit-Frontier combination, an acquisition of Spirit by JetBlue, a high-fare carrier, would lead to more expensive travel for consumers. In particular, the significant East Coast overlap between JetBlue and Spirit would reduce competition and limit options for consumers. It is surprising that JetBlue would consider such a merger at this time given that the Department of Justice is currently suing to block their pending alliance with American Airlines,” Frontier said in a statement in the wake of JetBlue’s bid.
  • The merger between Frontier and Spirit — seen by pros as being more synergistic and consumer friendly —has already come across the radar of Democratic Senators Bernie Sanders and Elizabeth Warren. Both fear the removal of a competitor in the marketplace could send airfare prices higher.
  • So, it’s hard to imagine JetBlue getting off any easier by regulators.

Yahoo! Finance

United Pushes Back Return of 777

KEY POINTS:

  • United Airlines doesn’t expect to fly dozens of Boeing 777 jets, grounded more than a year ago after one suffered an engine failure, until at least mid-May. The airline had most recently planned for at least some of the planes to return to service this month.
  • The further delay in the planes’ return is a challenge for United as it seeks to fly as many travelers as possible during what airline executives expect to be a bustling spring travel season, including a resurgence international travel. The jets are among the largest in United’s fleet.
  • “Due to the delay in the return of our PW777 aircraft to active service, the May flight schedule is being reconfigured to account for the lack of these aircraft,” United said in a note sent to pilots on Friday and viewed by CNBC.
  • In February 2021, one of United’s 777-200s bound for Honolulu from Denver suffered an engine failure, dropping debris in a residential area before returning to Denver’s main airport. No injuries were reported.
  • United has 52 Boeing 777s powered by Pratt & Whitney 4000 engines. They are “being removed from the schedule through May 12 and removed from international/Hawaii routes through May 25,” United said in the note.

CNBC

Southwest To Slow New Pilot Hires

KEY POINTS:

  • Southwest Airlines (LUV) has revised the number of pilots it expects to hire in 2022 owing to a shortage of flight instructors.
  • A spokesperson from Southwest said that while the airline is still “actively recruiting” First Officers, it expects to hire fewer pilots than initially expected.
  • According to a Bloomberg report, the Dallas-based low-cost carrier is looking to add 1,200 new First Officers in 2022, revised from an earlier estimation of 1,350.
  • President of the Southwest Airlines Pilots Association, Casey Murray told Bloomberg that the instructor shortage had directly impacted the amount of training that can be provided.
  • Murray added: “They are doing the absolute best they can, but they just don’t have the people for the amount of training needed.”
  • While travel demand over the summer has a strong forecast, US airlines such as United Airlines, JetBlue Delta and Southwest have slightly lowered capacity plans over rising oil prices.
  • Southwest, while protected from these costs through its fuel hedges, has also been facing staffing issues.
  • In January 2022, the airline cut its schedule and cancelled more than 5,600 flights due to staffing challenges. The airline’s new chief executive, Bob Jordan told analysts that around 5,000 staff had tested positive for COVID-19 in the first three weeks of 2022. However, Jordan, who took office on February 1, 2022, added that Southwest aims to hire 8,000 staff in 2022.

Aerotime Hub

Frontier CEO Talks About Merger & Travel Outlook

KEY POINTS:

  • Barry Biffle is juggling his day job as CEO of Frontier Airlines while also working to save a proposed merger with Spirit Airlines that would create the nation’s fifth-biggest carrier by some measures.
  • This figures to be a bounce-back year for airlines like Frontier that cater to leisure travelers. After two years of hunkering down during the pandemic, more people are flying.
  • Biffle says the recovery in travel will enable his Denver-based airline to return to profitability this summer. And he’s puzzled by doubters, including investors who are shorting the stock — betting that the shares will fall in price.
  • On the merger, Biffle says Frontier and Spirit are answering regulators’ questions, and he is not alarmed that several liberals in Congress are urging the Biden administration to take a close look at whether the deal will hurt consumers.
  • The bigger obstacle to a Frontier-Spirit deal is JetBlue Airways, which made its own $3.6 billion bid for Spirit last week. JetBlue’s offer is higher than Frontier’s $2.9 billion bid, which was announced in February.

ABC News

Weekly TSA Numbers

03142022 TSA Numbers

The Pilot Network Conference

  • TPNx is the annual networking conference that is part job fair, part mastermind, and part hangar party; it is all opportunity for us as aviation professionals. This is our chance to bring the companies that support and employ us to come together for a weekend of synergy!
  • Tickets: We are limiting this event to 400 tickets on Saturday and 400 tickets on Sunday. You are welcome to attend for a single day, or both (add each day to your cart separately for purchase).
  • Dates: 23-24 April 2022
  • Location: Orlando International Airport (MCO), C Terminal
  • Dress Code: Casual (no suits allowed). Look nice but be comfortable. Polo Shirts and jeans are recommended.
  • Spouses: We encourage spouses to attend. Companion ticket information will be emailed to you.
  • Resumes & Published Application: Highly encouraged if interested in a 1-on-1 meeting with Airline Recruiters.

REGISTER HERE

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