| From: John Koligman | 5/29/2024 12:54:55 PM | | | | | | American shares tumble 15% after sales strategy backfires; carrier cuts growth
PUBLISHED WED, MAY 29 20249:44 AM EDTUPDATED 11 MIN AGO
KEY POINTS
- American Airlines will slash its capacity growth in the second half of the year and consider a host of other changes to its operations, CEO Robert Isom said.
- The carrier cut its revenue and profit forecast and is parting ways with Chief Commercial Officer Vasu Raja.
- Pressure has been mounting on American’s leadership team after more upbeat results from rivals Delta and United.
An American Airlines’ Embraer E175LR (front), an American Airlines’ Boeing 737 (C) and an American Airlines’ Boeing 737 are seen parked at LaGuardia Airport in Queens, New York on May 24, 2024.
Charly Triballeau | AFP | Getty Images
American Airlines will slash its capacity growth in the second half of the year and consider a host of other changes to a sales strategy that backfired, CEO Robert Isom said Wednesday. The comments come a day after the carrier cut its revenue and profit forecast and said it is parting ways with its chief commercial officer, Vasu Raja.
American will grow capacity about 3.5% in the second half of the year compared with the year earlier, down from roughly 8% year-over-year growth in the first six months of 2024.
The company’s shares tumbled 15% on Wednesday while investors weighed the airline’s missteps as the peak travel season gets underway, with some analysts questioning how American can capitalize on what rivals expect to be a record summer.
Isom said American is weighing changes to a plan Raja led to drive direct bookings at the airline in lieu of third-party sites and travel agencies, a strategy that included gutting the airline’s sales department.
The changes angered some travel agencies who weren’t able to access some of the carrier’s fares as before, making it harder for them to sell tickets on American flights.
The chief commercial officer will leave the company next month.
“We’ve used a lot of sticks. We’ve got to put some more carrots in place and make sure that our product is available wherever customers want to buy it,” Isom said at the Bernstein Strategic Decisions conference on Wednesday.
American in February said it would limit some travel agency bookings from being eligible to earn AAdvantage frequent flyer miles. Isom said Wednesday that the airline would reverse that decision.
“That’s off,” Isom said. “We’re not doing that because it would create confusion and disruption for our end customer.”
Corporate bookings
Raja said last month American’s corporate booking growth was coming in behind big rivals Delta and United.
Corporate bookings are particularly lucrative for airlines especially when those travelers book at the last minute when fares are at their highest — so called close-in bookings. Airlines had struggled during the pandemic and shortly afterward when business travel was slow to return, but carriers have seen improvement lately.
“The weakness that you’ve seen in American is, I do believe, something that speaks to close-in bookings, the highest premium customers that, unfortunately, we haven’t made ourselves as available and easy to work with as we can,” Isom said.
On an earnings call last month, Raja said American’s corporate bookings were up mid-to-high single-digit percentage points in the first quarter compared with increases of around 14% touted by Delta and United.
“A significant miss driven in part by close in bookings puts AAL’s ability to reap the full value of a robust summer flying season in greater doubt,” Bernstein airline analyst David Vernon said in a note.
Revenue shortfalls
After the market closed Tuesday, American said its unit revenues could fall as much as 6% in the second quarter from a year earlier, down from its forecast last month of a no-more-than-3% decline. Airlines make the bulk of their money during the second and third quarters, but some areas have fared better than others.
Isom admitted Wednesday that the company has logged softer bookings than it expected and noted a supply and demand “imbalance” that has prompted carriers to discount tickets. He said industry capacity should come down in the second half of the year, while it slows its own growth.
United, minutes after American’s forecast adjustment Tuesday, reiterated its second-quarter earnings estimates, though it didn’t provide a revenue outlook.
“American’s diminished guide speaks far more to its flawed initial forecast than any broad-based shift in passenger demand,” JPMorgan airline analyst Jamie Baker said in a note Wednesday, adding United’s reiterated forecast was an encouraging sign for Delta.
American has also been prioritizing Sun Belt cities and its large hubs in Texas and North Carolina over coastal markets.
The Transportation Security Administration screened the most people ever over Memorial Day weekend, and executives from United and Delta have predicted a record summer, with very strong trans-Atlantic bookings. |
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| From: Sam | 6/15/2024 12:04:33 AM | | | | | | | Southwest Changed Flying. Now It Can't Change Fast Enough. -- WSJ | |
Dow Jones Newswires June 14, 2024 09:00:00 PM ET
Southwest Airlines' headquarters is a monument to its history.
Herb Kelleher's office has been painstakingly reassembled behind glass for employees to view, down to the tape dispenser on his desk and the ashtrays on his coffee table. Press a button in another corner of the building and you can hear a recording of the legendary laugh of Kelleher, the airline's co-founder and former chief executive, who died in 2019.
Thousands of photos, news clippings, old advertisements and other memorabilia line the hallway walls of the airline's Dallas offices. Models of Boeing 737 jets decked out in Southwest colors hang from the lobby ceiling.
Elliott Investment Management, the influential New York hedge fund, says Southwest is stuck in the past. The activist investor says it has amassed a $1.9 billion stake, which amounts to an approximately 11% economic interest in the airline, making it one of Southwest's biggest shareholders -- and its most vocal critics. This past week it demanded Southwest oust its CEO, overhaul the board, and consider shaking up its business model.
Southwest became the biggest U.S. airline by domestic passengers by doing things its own way. Trouble is, that's no longer working so well.
Expenses have ballooned and profit margins lag behind some rivals'. The airline is on track to receive only a quarter of the new jets it was expecting this year from Boeing, leading to bloated overhead. It is backtracking on pieces of an aggressive expansion strategy at a time when Americans are booking more flights than ever.
For decades, Southwest and its unflinchingly loyal base of fliers and employees were the envy of the U.S. aviation industry. The plucky, innovative airline spawned legions of copycats mimicking its simple operation, inspired business- school case studies, and generated industry-leading profit margins.
Southwest is so serious about improving its finances the airline is contemplating radical changes to its hallmarks. It is studying whether to start assigning seats, shake up boarding or offer some rows with extra legroom for a fee to widen its appeal. It has started putting its fares in Google Flights, an airfare search site it long avoided because it preferred that customers book trips on its own website or app.
Sacrificing attributes that helped make Southwest a fan favorite, like free checked bags, is a no-go for now.
"You cannot be stubborn about change," CEO Bob Jordan said Wednesday at an industry event. "At the same time, we're going to stick to our values."
Elliott is a formidable opponent. The hedge fund founded in 1977 by billionaire investor Paul Singer is one of the biggest and busiest activist investors, and its campaigns can turn rancorous.
It is known for never going into an investment without having several ways to win and for forcing changes that include management shake-ups or outright sales. The hedge fund waged a 15-year crusade to get the nation of Argentina to make payments on defaulted sovereign debt, and won in a massively lucrative bet. Several companies in which Elliott has recently built positions have ultimately replaced their CEOs, including the big wireless-tower owner Crown Castle, NRG Energy and Goodyear Tire & Rubber.
Some activists avoid airlines because regulators and unions have hefty influence over company operations, making them especially unpredictable investments. But billionaire investor Carl Icahn struck a deal for two seats on JetBlue Airways's board after unveiling a big stake earlier this year.
Southwest finds itself in a new, uncomfortable position: trying to win over fliers who don't get what's so great about it. Fares aren't always cheapest, and Southwest's cabins lack in-flight amenities that travelers have come to expect, such as seat-back entertainment and extra-legroom options. It only recently began adding power outlets and upgrading Wi-Fi to higher speeds.
Mitch Berk, a salesman who lives in Belleair, Fla., became a big Southwest fan when he lived near its hub at Baltimore/Washington International Airport. He loved the nonstop flights and earned the airline's coveted companion pass for his frequent travels.
Today, he picks discounter Allegiant over Southwest on some business trips because Southwest has cut back on nonstop options.
Berk wishes Southwest would assign seats to make boarding less chaotic -- a suggestion he says he offered on a survey from the airline after a recent flight to New Orleans.
"I know the open seating was intended to turn the plane around faster," he says, "but I don't think that's benefiting them anymore."
Some investors are growing impatient. Shares are down nearly 24% over the last two years, while United Airlines is up 34% and Delta Air Lines is up 55% over that time.
The Artisan Partners Global Value Team, whose clients hold about 1.8% of Southwest shares, has raised its own concerns about the airline's performance and management with Southwest's board chairman since the start of this year, said Dan O'Keefe, lead portfolio manager. The investment firm also wants Jordan fired.
"Southwest's rigid commitment to an approach developed decades ago has inhibited its ability to compete in the modern airline industry," Elliott wrote in a letter to the airline's board this past Monday.
'No-frills' flying
In its early days, Southwest wasn't particularly interested in how other airlines had done things. Kelleher wore a bag over his head in a 1980s commercial, after a rival airline executive suggested travelers should be embarrassed to fly no-frills Southwest.
The strategy worked. Southwest grew fast and kept costs lower than anyone else. It posted profits for 47 straight years until the Covid-19 pandemic in 2020 -- an unparalleled streak in a notoriously boom-and-bust industry. Corporate restructurings grew so common that Kelleher once described bankruptcy court as a "health spa" for airlines. Southwest has never filed.
Southwest's entry into a city would send rivals into a tizzy. The discounter swiped customers from competitors by undercutting their fares, and found new ones by offering nonstop routes that others didn't and tempting travelers to ditch road trips.
Employees, known internally as "Cohearts," were encouraged to think of Southwest like a family, and its irreverent work-hard, play-hard culture engendered fierce loyalty. New hires receive a standing ovation from employees who line the hallways at company headquarters. Flight attendants ad lib during onboard announcements.
"I got to where I stopped questioning them, because their results were so much better than anybody else's," said Doug Parker, the former American Airlines CEO who went head-to-head against Southwest for years.
But cracks have emerged. A late-2022 meltdown resulted in nearly 17,000 canceled flights, tarnishing the airline's reputation.
The airline has stumbled in trying to repeat its playbook of aggressive expansion into new markets, including Cozumel, Mexico, and Syracuse, N.Y.
Southwest's lenient policies on flight changes represented a key advantage that eroded when rivals eliminated most ticket-change fees during the pandemic.
Elliott's Sunday-afternoon call
Elliott spent about 18 months studying the industry and Southwest. It came to see Southwest as the ultimate airline fixer-upper: a floundering company with good bones, including a storied brand and a sterling balance sheet.
The hedge fund thinks fresh blood is key to a turnaround, and is pushing to replace some board members and executives. Elliott hired a recruiting firm to scout candidates, people familiar with the matter said. The new personnel would review the airline's operating strategy with an eye on cutting costs, improving technology, and boosting revenue.
Elliott isn't aiming to impose specific policies or transform Southwest into a legacy airline, according to people familiar with its thinking.
Elliott approached the airline this past Sunday afternoon. It held a brief call with Southwest Executive Chairman Gary Kelly and Jordan, the airline's CEO.
The next day, it made public a letter to the company's board and a presentation in which it criticized leaders for not embracing potential revenue boosters, like the fees other airlines charge for checking bags and reserving seats.
The airline had been preparing for a potential attack: It had already hired advisers at Bank of America and law firm Vinson & Elkins, according to people familiar with the matter. David Hess, who sits on Southwest's board, has also offered guidance. Hess has faced Elliott before: he was appointed a director of Arconic while the parts maker was in the midst of a tough fight with the hedge fund, and served as Arconic's interim CEO after its top executive was ousted.
The airline has sought to project calm. Jordan told employees in a memo Monday that it's "not at all unusual" for shareholders to comment on corporate strategy, and that the airline would engage as it does with any other investor. He has no plans to resign, he told reporters at an event in Washington, D.C., on Wednesday.
"Elliott is not directing the company," he said, adding that the hedge fund's presentation was "fairly light" on specifics it would like to change. Some ideas Elliott mentioned in its presentation are things Southwest is already looking at, the CEO said. The airline is planning to unveil its own plans at an investor day in September.
Some investors, analysts and industry observers think that bringing in an outsider to run the company would be a disaster, and that it makes sense for Southwest to be cautious about changing its offerings.
The activists are "dismissing something really important: the culture," Parker said. "Bringing in someone from outside ends it. You break the chain. It's done."
Beyond fares |
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| From: Sam | 7/11/2024 8:41:41 AM | | | | | | Delta Air Lines Q2 Earnings: EPS Miss, Revenue Beat, Underwhelming Q3 EPS Outlook And More
BENZINGA 7:54 AM ET 7/11/2024
Symbol Last Price Change |
| DAL | 46.86 | 0 (0%) | | QUOTES AS OF 04:10:00 PM ET 07/10/2024 | [mynote: pre-market, the stock is around 42.70]
Delta Air Lines, Inc. (DAL) shares are trading lower by ~9% premarket on Thursday following the release of its second-quarter 2024 results.
Delta reported second-quarter 2024 operating revenue growth of 7% year-over-year to $16.658 billion, beating the consensus of $15.452 billion. Adjusted operating revenue was $15.407 billion (+5.4% YoY).
Adjusted average fuel price of $2.64 per gallon, up 5% from last year’s quarter. Adjusted EPS was $2.36, missing the consensus of $2.37.
Total passenger revenue was $13.841 billion, a 5% increase YoY; Cargo revenue grew 16% YoY to $199 million, and Other revenue was $2.618 billion (+19% YoY).
Delta recorded an adjusted operating income of $2.269 billion, compared to $2.494 billion YoY, with an adjusted operating margin of 14.7%, down ~230 bps.
“Diverse revenue streams, including premium and loyalty, contributed higher growth and margins, underpinning Delta’s industry-leading financial performance and increasing our financial durability,” commented Glen Hauenstein, Delta’s president.
“We expect September quarter capacity growth of 5 to 6 percent and revenue growth of 2 to 4 percent, with sequential improvement in unit revenue trends through the quarter,” added Hauenstein.
Adjusted operating expenses increased by 8% YoY to $13.138 billion, and non-fuel costs were $9.808 billion (+9% Y/Y) for the quarter.
Delta generated an adjusted operating cash flow of $2.458 billion (-7% YoY). Adjusted net debt at quarter-end decreased ~3% Y/Y to $19.17 billion. Adjusted debt to EBITDAR of 2.8x, down from 3.0x at the end of 2023.
Total revenue per available seat mile decreased by 1% year over year. The passenger load factor was 87% vs. 88% in the second quarter of 2023.
DAL’s Air Traffic Liability ended the quarter at $9.4 billion, up $2.4 billion compared to the end of 2023.
“Growth continues to normalize and our teams are consistently running a great operation, enabling us to deliver efficiency. In the September quarter, we expect non-fuel unit costs to increase 1 to 2 percent year-over-year as capacity growth moderates,” commented Dan Janki, Delta’s chief financial officer.
“Debt reduction remains our top financial priority and we are progressing toward investment grade ratings, with gross leverage improving to 2.8x at the end of the first half,” added Janki.
Third-quarter 2024 Outlook: On a non-GAAP basis, Delta expects revenue growth of 2%-4%, EPS of $1.70 – $2.00 versus $2.06 consensus, and an operating margin of 11%-13%.
Reiterates 2024 Outlook: On a non-GAAP basis, DAL expects EPS of $6.00 – $7.00 versus the $6.58 consensus, free cash flow of $3 billion-$4 billion, and Adjusted Debt to EBITDAR of 2x – 3x.
Also Read: U.S. Airlines To Take Flight In Q2: Analyst Predicts Strong Results, 10% Operating Margin
Price Action: DAL shares are trading lower by 8.54% at $42.86 premarket at the last check Thursday. |
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| From: Sam | 7/23/2024 6:06:28 PM | | | | | | | FAA Launches Audit of Southwest Airlines After Close Calls -- 2nd Update |
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| Dow Jones Newswires July 23, 2024 03:46:00 PM ET
U.S. air-safety regulators are launching a broad review of Southwest Airlines after a string of recent close calls and other incidents.
The Dallas-based airline has had a number of potential safety incidents in recent months, including flights that descended to low altitudes too early and a flight that took off from a closed runway.
Southwest acknowledged the Federal Aviation Administration's audit and said it has been working closely with the agency in reviewing recent episodes. The airline said it had already formed a team of experts and leaders from the airline, its unions and the FAA to take a close look at its safety system.
"This group is tasked with performing an in-depth, data-driven analysis to identify any opportunities for improvement. Nothing is more important to Southwest than the safety of our customers and employees," the airline said.
The FAA said it has increased oversight of Southwest to ensure it is complying with federal safety regulations, and that the timeline of the review will be driven by safety.
Southwest's most recent incident came earlier this month: A July 14 flight descended to as low as 150 feet over Florida'sTampa Bay -- miles from the runway, according to data from Flightradar24. An air-traffic controller alerted the pilots and they discontinued their planned approach to Tampa and diverted to Fort Lauderdale.
The FAA has opened investigations into individual instances, but the audit will go further, assessing Southwest's operations more broadly.
The audit is expected to be completed within three months, according to a government official and a person briefed on the matter. It is expected to focus on pilot training, various types of approaches for landing, and maintenance procedures related to opening and removing engine covers and panels, they said.
The review will also delve into the local FAA office that oversees Southwest, the government official said, and as part of its ramped-up scrutiny, the FAA is expected to assign a safety issue analysis team to examine Southwest's practices over a longer period.
Southwest's pilots union told members Tuesday that the FAA's Safety Analysis and Promotion Division intends to perform an in-depth examination of the airline's operations, covering everything from manuals to training and line operations.
"Expect increased scrutiny on ground events and safety, training on abnormals, turbulence safety, and aircraft maintenance," the union said in a message to Southwest pilots Tuesday.
United Airlines faced similar federal scrutiny earlier this year after its own operational mishaps. In March, one of the airline's 25-year-old jets was found to be missing a panel after landing, and another plane lost a wheel during takeoff in a separate incident that month.
At Southwest, a flight in June took off from a closed runway in Portland, Maine, after pilots overlooked a notice about the runway's status, according to the National Transportation Safety Board. Another flight that month descended to a very low altitude several miles away from an airport in Oklahoma City.
In April, a Southwest flight plunged within about 400 feet of the ocean near Hawaii in a mishap while the pilots attempted to redo a landing in bad weather. Another flight in March veered off course during an attempted landing in poor conditions and came within 800 feet of the air-traffic control tower at LaGuardia Airport in New York. There have been two Southwest flights that lost engine covers that were left unlatched.
Southwest's vice president of flight operations, Lee Kinnebrew, in May wrote to employees that the airline was examining whether there was a disconnect between its procedures, training and performance. He added that the airline was conducting focus groups in some bases to determine whether there were ways to improve and guard against complacency and distractions.
"We have more Captains and First Officers in new seats than ever before. We're adapting to an increasingly complex network with new tools and systems," Kinnebrew wrote.
Write to Alison Sider at alison.sider@wsj.com and Andrew Tangel at andrew.tangel@wsj.com
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| From: Sam | 7/25/2024 5:11:19 PM | | | | | | Southwest Airlines is getting rid of open seating model, launches red-eye flights [The Dallas Morning News]
TRIBUNE CONTENT AGENCY 5:09 PM ET 7/25/2024
Symbol Last Price Change |
| LUV | 28.08 | +1.47 (+5.5242%) | | QUOTES AS OF 04:10:00 PM ET 07/25/2024 |
Dallas-based Southwest Airlines(LUV) announced the end of its open seating model, one of the airline’s most high-profile policies.
For over 50 years, Southwest(LUV) has been known for open seats on its aircraft, but now will lean into models for seating like its competitors. According to the airline, Southwest(LUV) conducted research and 8 million simulation-based boarding trials to reach the decision. More detailed information about the company’s changes are expected at Southwest’s investor day in late September.
“It’s clear that the open seating model that served us well for so many years is no longer optimal for today’s customer,” said Bob Jordan, Southwest(LUV) CEO, to shareholders. “I want to stress that this decision was not made lightly.”
Southwest’s research found 80% of its customers and 86% of potential customers prefer an assigned seat. When customers choose a different airline, the open seating policy is the No. 1 reason cited for the change, Southwest(LUV) reported.
Ancillary products related to boarding, like early check-in, generate “just shy of a billion dollars” for Southwest(LUV), Jordan said. The changes to the seating model, he said, is “substantially north of that.”
New seat configurations require Federal Aviation Administration approval, Jordan said, which can take several months. Southwest(LUV) has a fleet of roughly 800 aircraft that will see updates, including the new seat designs and cabin interior announced earlier this year. Jordan said the carrier needs to finish designing the seat layout and then comes the long certification process.
With the new changes, Ryan Green, formerly executive vice president and chief commercial officer, will now serve as executive vice president of commercial transformation to shepherd the rollout.
The airline will also add premium, extended legroom to the cabin. Southwest(LUV) expects roughly one-third of seats across the fleet to offer extended legroom, the same as its narrowbody aircraft competitors.
Jordan also said, despite the changes to seating, he believes Southwest(LUV) can still board passengers with just a single gate agent.
“I’m comfortable that we’re moving towards the customer and that those customer desires will not shift on us,” Jordan said.
Jordan also said financial results for the second quarter were “impacted by both external and internal factors.” Southwest(LUV) had previously lowered its financial expectations for the quarter and reported a $7.4 billion operating revenue for the quarter, a 4.5% increase from the previous year. Unit revenue was slightly better than the company’s previous expectation of up to 4.5% for the quarter, which Southwest(LUV) attributed to the final days of June and “the resulting benefit from incremental bookings from other carrier cancellations.”
Analysts at Melius Research wrote the expectations for the product changes are now “very high” and there is some associated risk as a result.
“We won’t deny the potential of the change underway at Southwest(LUV), but again, change takes time and we still put that turnaround time at 3 years...” researchers wrote.
Southwest (LUV) also announced the addition of red-eye flights. The flights will begin on Valentine’s Day 2025 with five initial nonstop routes: Las Vegas to Baltimore and Orlando; Los Angeles to Baltimore and Nashville; and Phoenix to Baltimore.
Overnight flights at Southwest(LUV) were rumored to begin in the next few years, but were rolled out ahead of expectations. Southwest(LUV) will phase in additional redeye flights in its upcoming schedules as part of its “multi-year transformation to a 24-hour operation,” the airline reported. It expects to provide incremental revenue and cost savings.
The changes come as activist investor Elliott Investment Management has called on Southwest(LUV) to make dramatic alterations to the airline’s business model to generate a return for shareholders.
On Thursday, Elliott published a statement on Southwest’s changes hours after the air carrier discussed its financial results, calling them “more than a decade late.”
“Today, Southwest(LUV) finally conceded that four out of five customers’ preferences went unmet in recent years,” the statement read. “These preferences did not emerge overnight; management simply was not doing its job.”
Elliott has disclosed a $1.9 billion stake in the air carrier and has called on the airline to implement some money-making changes and larger asks like a change in leadership to do right by its shareholders. Despite these pressures, Jordan said he will not step down.
Despite Southwest(LUV) changing the seating policy, it’s not looking to change its two-bags fly-free policy at this time, Jordan said. Jordan said he can’t speculate, but reported that Elliott hasn’t made an effort beyond sending the public letters to the board. Elliott said in Thursday’s statement they’ve been “engaged in direct dialogue” with Southwest’s board.
“So far, they’ve not shown any willingness to engage in any meaningful conversations with us,” Jordan said. |
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| To: OldAIMGuy who wrote (1841) | 8/4/2024 10:35:02 PM | | From: Sam | | | | CrowdStrike to Delta: Stop Pointing the Finger at Us -- WSJ
Dow Jones Newswires August 04, 2024 10:06:00 PM ET
CrowdStrike says it isn't to blame for Delta Air Lines' dayslong meltdown following the tech outage caused by the cybersecurity company, and it isn't responsible for all of the money that the carrier says it lost.
In a letter responding to the airline's recent public comments and hiring of a prominent lawyer, CrowdStrike said Delta's threats of a lawsuit have contributed to a "misleading narrative" that the cybersecurity company was responsible for the airline's tech decisions and response to the outage.
"Should Delta pursue this path, Delta will have to explain to the public, its shareholders, and ultimately a jury why CrowdStrike took responsibility for its actions -- swiftly, transparently, and constructively -- while Delta did not," wrote Michael Carlinsky, an attorney at law firm Quinn Emanuel Urquhart & Sullivan.
Delta didn't comment on the CrowdStrike letter.
The letter to Delta's legal team Sunday evening is the latest move in a growing conflict between the cybersecurity firm and the airline, which was thrown into several days of disarray following the outage.
Delta Chief Executive Ed Bastian said in an interview on CNBC last week that the outage cost the airline about $500 million, including lost revenue and compensation costs. The airline has alerted CrowdStrike and Microsoft that it is planning to pursue legal claims to recover its losses, and has hired litigation firm Boies Schiller Flexner to assist, according to a memo Bastian sent to Delta employees last week.
CrowdStrike said Sunday that its liability is contractually capped at an amount in the "single-digit millions." The company has said a bug in a quality-control tool that it uses to check system updates for mistakes allowed a critical flaw to be pushed to millions of machines running Microsoft Windows.
The cybersecurity company reiterated its apology to Delta for the initial disruption and said it had offered on- site assistance to Delta but was told it wasn't needed. It said Bastian didn't respond to outreach from CrowdStrike's CEO.
CrowdStrike said it would respond aggressively to any litigation and demanded that Delta preserve documents and records related to its response to this most recent outage as well as previous IT problems over the past five years and other information related to its technology systems and backup plans.
Most airlines were back on track within a couple of days after CrowdStrike's errant update. Delta continued to struggle well into the following week -- something CrowdStrike highlighted in its letter. The airline canceled more than 5,000 mainline flights over several days, far more than rivals. The U.S. Department of Transportation is investigating how the airline handled the disruption and its customer response.
Bastian has said Delta is heavily exposed to Microsoft and CrowdStrike and that was why it suffered so extensively. He wrote in his message to employees last week that the airline's IT, operations and customer care teams are conducting an intensive analysis of the event to see what lessons it can draw from it.
CrowdStrike's outage hit 8.5 million devices, the cybersecurity company has said, but the problems experienced within corporate information-technology systems widened the impact. The outage temporarily grounded activity across a range of businesses, organizations and institutions such as banks and restaurants, colleges and government agencies.
Write to Alison Sider at alison.sider@wsj.com |
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| To: Sam who wrote (1842) | 8/5/2024 10:03:16 AM | | From: OldAIMGuy | | | | Hi Sam, Re: Airline "outage"
A lot of posturing going on with that mess. I'm sure the lawyers are very busy.
Some vacationers got to extend their stays! Some had to delay their vacations a few days. All in all, no harm, no foul............
However, this has opened up a chance to add shares of JETS for those who enjoy buying during dips.
schrts.co
JETS has proved to be a pretty good trader for many investors. For me, it's offered me several opportunities over the years to Trim and Backfill inventory of JETS shares. My current 'hold zone' is from $14.83 to $23.71. Today's price is moving quickly toward an accumulation target where I'll add 12% to my overall position. So far, so good. We started this position post-Covid and have done okay with it.
I'll see if I can grab some pics of the history......
Best wishes,
OAG |
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| From: Sam | 8/5/2024 7:51:51 PM | | | | | | Elliott Confirms Southwest Airlines Stake Amid Push for Change -- Market Talk
Dow Jones Newswires August 05, 2024 07:46:00 PM ET
1946 ET - Elliott Investment Management disclosed its 7% beneficial ownership stake in Southwest Airlines, according to a Monday filing with the Securities and Exchange Commission. Its 11% investment size hasn't changed since it was first mentioned in June, when the hedge fund said it had built a $1.9 billion stake in Southwest and demanded the airline oust its chief executive, overhaul its board and consider big business-model changes. In response, the low-cost airline last month adopted a shareholder-rights plan that would kick in if an investor acquires at least 12.5% of the company, giving all other shareholders the right to buy stock at a 50% discount. Southwest shares rise 2.4% in after- hours trading. ( connor.hart@wsj.com ; @connorhart22) |
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| From: Sam | 9/10/2024 10:34:38 AM | | | | | | Southwest Airlines Overhauls Board Amid Activist Pressure - Update
Dow Jones Newswires September 10, 2024 09:18:00 AM ET
Southwest Airlines Executive Chairman Gary Kelly will step down next year in a big board shake-up as the airline faces pressure from an activist investor to overhaul its leadership and business strategy.
Kelly has worked at Southwest for nearly 40 years. He served as Southwest's chief executive for 18 years and has been its board chairman since 2008. He left the CEO role in 2022 to become executive chairman.
Elliott Investment Management earlier this summer announced it had built a big position in Southwest with the aim of revamping what it said was the airline's entrenched leadership -- including Kelly. Elliott has said the airline needs swift changes to address what it has said is an outdated strategy and lackluster results.
The fund last month announced its intention to launch a proxy fight at Southwest, including plans to nominate 10 directors to the airline's 15-member board.
Six other Southwest directors intend to retire in November as the airline looks to refresh its board. Southwest said it would appoint four new directors in the near future, and will consider filling as many as three of those spots with candidates from the slate Elliott put forward last month.
Elliott didn't immediately respond to requests for comment Tuesday.
Kelly wrote Tuesday in a letter to Southwest shareholders that his role as executive chairman was always meant to be transitional. He said he had intended to consider retiring next year but opted to expedite his plans in an effort to address questions about the airline's governance and demonstrate his confidence in the airline's other leaders.
"Now is the time for change. It's time to shake things up, not just stir them a bit," Kelly wrote.
But Southwest and its board continued to defend Chief Executive Bob Jordan, another of Elliott's targets.
"Bob has a proven track record over decades and, most importantly, he has what it takes to lead Southwest through a significant transformation and usher in a new era of profitable growth, innovation, and industry leadership," Kelly wrote in his letter.
The announcement comes after Kelly and two other independent directors met with Elliott at its New York office on Monday. Kelly acknowledged in his letter that the airline's emergence from the Covid-19 pandemic has fallen short of its expectations, but said the airline is taking bold steps, including making sweeping changes to its business model by assigning seating, offering more premium options, and operating red-eye flights.
-Dean Seal contributed to this article.
Write to Alison Sider at alison.sider@wsj.com |
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