Happy Turkey Day to you too Tsquare!

67 WALL STREET, New York - November 25, 2009 - The Wall Street Transcript has just published its Travel and Leisure--Airlines, Hotels, Resorts, Cruise Lines, and Restaurants Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available via The Wall Street Transcript Online.

In the following brief excerpt from just one of the 25 interviews in the 137 page Special Report, the Wall Street Journal's "Best on the Street" airline equity analyst discusses the outlook for the sector and for investors.

Kevin Crissey is a Director in UBS Investment Research's transportation group, specializing in U.S. airlines. In 2008 Mr. Crissey was named number one stock picker for U.S. airlines in The Wall Street Journal "Best on the Street" report. Mr. Crissey joined UBS as an Associate Analyst in February 2003, following airfreight, railroad, trucking, logistics and shipping stocks. Prior to joining UBS, Mr. Crissey served as a Consultant to UBS and other financial services companies for five years. He also worked in the real estate group for Smith Barney for four years. Mr. Crissey holds an MBA in finance from New York University, and a B.S. in finance and international business from Pennsylvania State University.

TWST: Let's start with the big picture and your outlook for travel-related companies - you cover both airlines and some of the online travel sites. What is your outlook? Is the worst behind us?

Mr. Crissey: I sure hope so, and the data seems to suggest that that's the case. It's clearly still a discounters' market, which is playing well for the online travel guys, where basically you have been able to lower your prices and stimulate leisure traffic. Not so much on the business side, which is typical of the demand elasticities, the differences between those two types of passengers. The planes are pretty full right now, and so what we expect going forward is that you are going to see it be more about pricing than about volume. And we think that travel demand is getting better. I'm not sure how fast it's going to get better, that's a function of the economy.

But we're hopeful that it gets better, and we think it'll get meaningfully better starting in January from the corporate side, as new travel budgets are set with hopefully a brighter outlook. When that happens, you may be replacing a backpacker with a briefcase guy or gal. And so that would be good for the pricing of the airlines, and I think a similar read-through for what it would mean for hotels. The online travel agencies probably have seen or are seeing the peak of their volume growth. And now the question becomes: Are they better off in a trade where they get a higher price point and a little bit less volume? Because I think the hotels and airlines are about as desperate as they're going to be in terms of the interest in selling through online travel agencies right now. So we're optimistic on the outlook for things improving; the question is how fast is that improvement.

TWST: You said the online sites are seeing the peak of volume growth. Has business held up well for them due to consumer price sensitivity? Has that resulted in increased traffic for the sites?

Mr. Crissey: Yes, there are a couple of reasons going on. The hotels and the airlines are basically giving them as much inventory as they can sell, and the consumer is certainly looking for a bargain; they'll travel but only at discounted prices. So that lends itself well to the online travel market. And then additionally, they cut booking fees both for hotels but more meaningfully for airline tickets, and that's giving less reason for a customer to switch from the Expedia (EXPE), Priceline (PCLN), Orbitz (OWW), Travelocity sites to the supplier-direct channels.

DAL N Vacation
 

More like a quick van to the hotel for 8 hours at MCI and, if lucky, enough time for a beer and some wings in the hotel restaurant at BUF. Thats how we do it on the 9! :D

Seems like the topics of discussion have slowed down a bit!:) So I thought I'd ask if there is any more information (read rumors!) about the post SOC bid!

Denny

I just finished a 3 day, here are the rumors that I heard (3 different LCA's and the chief pilots office....in no particular order):

-SOC is done and just waiting for signatures
-expect SOC Dec 15 or 16
-MSP 320 losing 80 crews and gaining 80 MD90 crews (same numbers for SLC due to the swapping of a/c)
-flying levels on the 320 in MSP will not be reduced and therefore will not lose as many crews from the 320 (yes, this conflicts with above rumor)
-possibly getting additional ~11 A330's from Boeing because of the 787 delays
-Quite possibly hiring for the summer
-"Are you crazy, we are so overstaffed there is no way we could possibly ever begin to think about hiring. I think we are going to furlough" (unnamed line pilot).
-After we buy JAL, we will quickly purchase AK and then purchase JFK to make it our own private airport on our quest to conquer the world! Well, I didn't actually hear this one.....


Just passing along what I heard

A330's from Boeing? When did Boeing purchase Airbus?

good stuff, 1 question though, why would we get 330's from boeing?

I asked the same thing about Boeing and the 330's but word I got was that for some reason they are trying to offer up some leased 330's. I couldn't get any specifics and am just passing on the info for discussion. I do know that NWA was looking at some additional 330's before the merger when it was first identified that the 787 would be late. Then again, we were looking at a DC-9 replacement since the early 90's, and we all know how quickly they have reacted to that project.

Perhaps Boeing would be buying them in a round-a-bout way because of penalties resulting from the 787 delays?:p

POST SOC Prognostications

-MD90 / A320 semi-swap
-JFK777 closed DFW777 opened - approx 2.5-3 times the size of JFK approx 100-120 pilots per seat
-765 opened in JFK 8-12 jets worth of crews (some in the know think it'll happen on this bid)
IOW, no new news
I haven't asked anyone about A330's to ATL or JFK

Happy Thanksgiving

Some other rumors.
I'm stating a fact here: Open skies w Japan and JAL JV are separate issues.

- Rumor is that DAL/DALPA is trying to get DOT to delay open skies until after JAL JV issue is over (whether DAL or American is succesful). To me this seems backward, but that's the rumor.

rumor: SEA 76er won't happen this bid.

Talk amonst yourselves.