Thursday, April 17, 2008
Both Continental Airlines (NYSE: CAL) and Southwest Airlines (NYSE: LUV), the two most financially-secured airlines have hit turbulence in the wake of the rising gas prices.  The basic equation shows that as fuel prices sky-rocket, the airlines hit turbulence and will have to ground themselves, if you will.  Southwest has been one of the only airlines to see profits for the last several quarters.  However, the company has finally seen the same turbulence that has been giving other major airline carriers financial problems due to such high fuel costs.

Continental and Southwest Airlines will both attempt to fight the fuel battle by raising prices.  Southwest Airlines Co. which always has deals for travelers for its select domestic locations had to raise its summer prices last week, only then to raise them an additional $10  for flights each way from mid-June through mid-August.  In addition to raising prices, Southwest will have to postpone their plans for fleet expansion.  

The leading low-cost carrier Southwest Airlines Co., headquartered out of Dallas, Texas, has been the only airline company to see a profit this first quarter.  The company’s revenue rose 15.1% to $2.53 billion.  Although the company had reported a profit, they still saw a decline in their numbers as they earned only $34 million, or 5 cents per share, in the first quarter compared with $93 million, or 12 cents per share, a year earlier.

Continental Airlines, the fourth-largest airline carrier by passenger volume, has reported a first-quarter net loss of $80 million, or 81 cents a share, compared with net income of $22 million, or 21 cents a share, a year ago.  Due to the Houston-based company’s large international traffic, Continental’s revenue rose 12% to $3.57 billion.

Continental claims that they will take 14 older, less fuel-efficient aircrafts out of service.

Continental, in addition, will remove 34 of its older fleet of Boeing 737-300’s. Continental’s reduction of their older fleet will reduce the U.S. mainline capacity by 5% this upcoming Fall. “In this fuel environment, we must reduce our domestic capacity to help reduce our losses in the domestic system," said President Jeff Smisek.  Continental and Southwest Airlines will be cutting seat capacity to reduce routes that aren’t providing the airline companies with sufficient funds.  This is a first among U.S. airlines this year to trim domestic capacity even if it cuts their share of the market.

Related Companies
Northwest Airlines Corporation (NWA)
AMR Corporation (AMR)
4/17/2008 9:28:15 PM UTC  #    Comments [1]  |  Trackback
4/18/2008 2:35:05 AM UTC
Quiet Rockland
Law Office of John J. Tormey III, Esq.
John J. Tormey III, PLLC
217 East 86th Street, PMB 221
New York, NY 10028 USA
(212) 410-2380 (fax)
e-mail: brightline@att.net
http://ejectsturgell.blogspot.com

Quiet Rockland Urges America To REJECT Robert A. (“Bobby”) Sturgell As FAA Administrator

In the lyrics of Dewey Bunnell of the group America, from their 1971 song entitled “Sandman”:

“All the planes have been – grounded”.

It’s time to bring back America. The REAL America. The FAA is more broken than the cracked airplanes it purports to regulate. FAA Head “Bobby” Sturgell is a losing legacy case – the son of J. Edgar Hoover’s personal secretary, planted years later at the FAA, an agency that the powers-that-be assumed Sturgell could never muck up. Well, that failed legacy case named “Bobby” Sturgell DID muck it all up. Big time. The United States aviation system is now at flashpoint crisis. Enter, Sandman.

Quiet Rockland opposes Robert A. “Bobby” Sturgell’s confirmation as FAA Administrator. Moreover, Quiet Rockland calls for “Bobby” Sturgell’s SUMMARY REMOVAL as Acting FAA Administrator. “Bobby” Sturgell is an abominable public official. The current regime of the FAA is a dismal nightmare. The FAA is a guileful federal agency still dwelling in the pocket of industry. Together, Sturgell, the FAA, and the airlines derisively and contemptuously laugh at you and me, the American people – the people to whom this country belongs. But no more.

This spring started with cracked Southwest Airlines planes. The FAA allowed these planes to remain in revenue service. The FAA allowed passengers to fly in these cracked airplanes. And Southwest was more than happy to take money from passengers for flying in these cracked planes. Now but a few weeks later, at least four airlines have filed for federal bankruptcy protection, with more bankruptcy filings that may follow. The airline industry is disintegrating before our eyes just like the tired old defective planes which they pretend to maintain.

April 2008 has seen record numbers, in the thousands, of planes grounded. The groundings are “Bobby” Sturgell’s fault. The groundings are the direct result of a previously-illusory safety inspection regime and the astounding and unlawful regulatory ineptitude of the FAA, now under FBI investigation and Congressional investigation. The results of the groundings to the everyday American, were and are intolerable. Many thousands of travelers were stranded, and we are told by some that the problem may continue through the summer and beyond. This is what “Bobby” Sturgell would have all Americans endure for FIVE more years if he is confirmed as FAA Administrator? He MUST be joking.

Moreover, “Bobby” Sturgell now threatens our national stability and security. As John Dean observed almost two generations ago at the outset of the long national nightmare known as Watergate, there is a cancer growing on the Presidency. There is a cancer growing on the Administration, and on this country. That very cancer is failed FAA Acting Administrator “Bobby” Sturgell himself, and the rogue dysfunctional federal agency known as the FAA. “Bobby” Sturgell must be ejected. The FAA must be repopulated with competent and honest federal officials. As Senators Lautenberg and Menendez observed in an April 10, 2008 letter to “Bobby” Sturgell:

“The FAA’s hands-off approach to airline oversight has allowed …deliberate violations…, shoddy maintenance, incomplete record-keeping, and complacent oversight practices to fester”… “Why were… potentially unsafe planes allowed to fly…?”

Instead of protecting our safety like they are supposed to do, the FAA, in continuing complicity with the airlines, threatens hero aviation inspector whistleblowers. The House Transportation Committee hearing on Thursday April 3, 2008 exposed all of that in a 9-hour webcast, for all the world to see. As Congressman James Oberstar the Head of the House Transportation Committee observed, if last Thursday’s hearing “had been a grand jury proceeding, it would have resulted in indictments”.

While we find it unbelievable, a few Senators, and even possibly the President, continue to this day to support “Bobby” Sturgell as FAA Head. Quiet Rockland disagrees. We are proud Americans who believe in the integrity of the American system of government. We want national stability, national security, aviation safety, environmental justice, and aviation justice. We’re sick of our country’s aviation system being laughed at by other countries. We want to foster continued public pride in our government, and a continued belief that the system works - in the eyes of U.S. citizens, and in the eyes of the rest of the world. “Bobby” Sturgell’s removal as Acting FAA Head is integral to these goals.

Even if you assume arguendo that Mr. Sturgell did not himself personally make or sanction threats against aviation safety whistleblowers, the offensive activity occurred at a failed federal agency under his watch – as did all the other offensive FAA activity recently unearthed. The April 3 House hearing chronicled many other of “Bobby” Sturgell’s FAA failures. During that hearing we also learned that circa 2003 the FAA launched a “Partnership Program” wherein individuals spent months hand-delivering packets to airlines, happily announcing that airlines had become the “customers” and “clients” of the FAA. That’s flat wrong. WE THE PEOPLE are the customers of the FAA. The FAA is supposed to regulate the airlines. The FAA is not supposed to kiss the backsides of the airlines. As for “Bobby” Sturgell’s role and involvement in all of this perversion of justice and dereliction of federal duty, one only need note that “Bobby” Sturgell started work at the FAA in the very same year as the “Partnership Program” was launched – 2003. “Bobby” Sturgell is a private dancer for the very airline industry that callously and inhumanly threatens our safety. Never mind fox and henhouse. Just throw the bums out.

Quiet Rockland urges each Honorable U.S. Senator to further forestall any vote on “Bobby” Sturgell’s confirmation. Additionally, Quiet Rockland urges all Senators, and all Americans, to carefully consider the manifold reasons why any vote in support of “Bobby” Sturgell would be antithetical to the interests of this country and its citizens. What we want, is what is in the best interests of the American people – removal of “Bobby” Sturgell from office, NOW. The talent pool is deeper than this. There is more to leadership than rhapsodizing through one’s old aviator goggles. We have an ugly aviation safety crisis and scandal on our hands. Let’s wash our hands of it. Let’s wash our hands of “Bobby” Sturgell and his [f]ailed [a]viation [a]dministration. Quiet Rockland urges all Americans to Just Say No to “Bobby” Sturgell. Quiet Rockland urges all Americans to let all of our elected officials hear that, loud and clear. Enter, Sandman. The further case against Bobby Sturgell is posted at the following website:
http://ejectsturgell.blogspot.com

Respectfully submitted,

John J. Tormey III, Esq.
Quiet Rockland
http://ejectsturgell.blogspot.com
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