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CAL stock up 250% in last 12 months

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CAL stock has indeed been very impressive. Sure wish I would have bought more when it was down in the teens. The CAL story goes to show that none of us know what our employers will be like 20 years from now. Who would have thought CAL would be where it is today after the 80's struggles and the double bankruptcy trip. Kind of makes you wonder what US AIR will be like here in a couple years.
 
Captain Overs said:
CAL is highly leveraged and has a lot of debt. Things are good as long as there is no hicup in the economy.
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That's what everybody said before 9/11, apparently all the other companies are more highly leveraged and have more debt. Sadly, this appears to be business as usual in corporate America these days.
 
You're right except CAL has nothing for collateral. Last time they needed money they used aircraft parts to gain leverage. At some point you have to pay the piper.....or file bankruptcy.
 
SuperKooter said:
Well Cal is the best run Legacy out there. Our product is the best
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Conde Naste just did a review of airlines. International, Domestic, and low cost. Three things went into the criteria:

1) Room for each passenger
2) In flight entertainment
3) Service

CAL finished 8th on the list for domestic airlines. Beaten by almost every major. You're right, I guess your product is the best.
 
Captain Overs said:
You're right except CAL has nothing for collateral. Last time they needed money they used aircraft parts to gain leverage. At some point you have to pay the piper.....or file bankruptcy.
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Not sure what your beef with Continental is, but have you read any of the annual reports lately? There really aren't too many sterling looking balance sheets out there.
 
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Captain Overs said:
Conde Naste just did a review of airlines. International, Domestic, and low cost. Three things went into the criteria:

1) Room for each passenger
2) In flight entertainment
3) Service

CAL finished 8th on the list for domestic airlines. Beaten by almost every major. You're right, I guess your product is the best.
Click to expand...

If you look at the RASM compared to all the other carriers, there must be some reason people are willing to pay more.
 
CAL offers the best legacy product out there right now. I will however say that CAL does not offer the best domestic product out there right now. I'll leave it up to you to figure out who I think has the best domestic product.
 
Truckdriver said:
CAL offers the best legacy product out there right now. I will however say that CAL does not offer the best domestic product out there right now. I'll leave it up to you to figure out who I think has the best domestic product.
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I imagine you are talking about Jet Blue, no arguments here, I JS on them (you) all the time. Unfortunately, people have proven that they consistently choose domestic service almost exclusively by price. The average schmoe is not willing to pay a premium for better domestic service so having better domestic service doesn't appear to be the advantage it should be. This is the very reason Cal flies its 757-300's almost exclusively to FL. The cost is lower because of the number of available seats.
 
EWR_FO said:
Isn't that the objective, to make money?
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Sure it is. But it only works until one of the LCC's puts service on that route. At that point the RASM at CAL drops when they price match and they lose money. The RASM on routes with LCC competition is probably very low. The problem CAL has is there aren't many domestic routes these days without LCC competition. So they get their money from international flights which works great until they open up the skies and LCC's head across the pond.
 
Truckdriver said:
Sure it is. But it only works until one of the LCC's puts service on that route. At that point the RASM at CAL drops when they price match and they lose money. The RASM on routes with LCC competition is probably very low. The problem CAL has is there aren't many domestic routes these days without LCC competition. So they get their money from international flights which works great until they open up the skies and LCC's head across the pond.
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The costs of LCC's can do nothing but increase as the companies age. It also appears that the LCC's are running out of places to fly as the competition heats up. I agree, the RASM is probably very low on competing routes, but as long as it is positive they will continue to fly it.

I would think it would be prohibitively expensive for a LCC to start an international operation from scratch, but that is just my opinion.
 
CAL has had a very good run. But when the market opens, I'm going to buy Dec $50 puts for $5.60 each. The more it goes down from its current $44.97 price, the more those puts will be worth. I'm betting they will be worth $9-$10.00 by the end of the week. I will post within a half hour of when I sell the puts.
 
EWR_FO said:
The costs of LCC's can do nothing but increase as the companies age. It also appears that the LCC's are running out of places to fly as the competition heats up. I agree, the RASM is probably very low on competing routes, but as long as it is positive they will continue to fly it.

I would think it would be prohibitively expensive for a LCC to start an international operation from scratch, but that is just my opinion.
Click to expand...

LCC costs will increase as has been seen at JBLU the last year. Legacy costs also increase although not as much on a percentage basis as a newcomer. Once you get past the 5-6 year mark however, those increasing costs are not as much as the first 5 years. Most LCC's have now passed that mark so costs shouldn't be a great concern although they are a factor. I think the LCC's to watch out for when they open up the Atlantic will be those in Europe. Ryan Air and Easy Jet would not be good to US Legacies that are now depending on Atlantic traffic to keep their margins up. I agree that the costs of U.S LCC's starting up a big international operation would be expensive, but I think they would jump into the game if the yields looked right. SWA basically has a 757 operation with ATA and JBLU would have a common fleet type with the 330. I don't think it will ever happen, but never say never in this industry.
 
Truckdriver said:
LCC costs will increase as has been seen at JBLU the last year. Legacy costs also increase although not as much on a percentage basis as a newcomer. Once you get past the 5-6 year mark however, those increasing costs are not as much as the first 5 years. Most LCC's have now passed that mark so costs shouldn't be a great concern although they are a factor. I think the LCC's to watch out for when they open up the Atlantic will be those in Europe. Ryan Air and Easy Jet would not be good to US Legacies that are now depending on Atlantic traffic to keep their margins up. I agree that the costs of U.S LCC's starting up a big international operation would be expensive, but I think they would jump into the game if the yields looked right. SWA basically has a 757 operation with ATA and JBLU would have a common fleet type with the 330. I don't think it will ever happen, but never say never in this industry.
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The traffic in the Atlantic has always been about the pax in the front of the airplane and cargo. Trying to fly coach pax and make it up in volume has been proven time and again to be a failure (Laker, PE, etc). If it was so easy, they would be there by now. The Atlantic is "open" right now, any company can fly across any time they want.
 
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Ben Franklin said:
...and how did the flights to FL out of EWR work out for JBLU?
:0

Sincerely,

B. Franklin
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You mean how are the flights out of EWR to FL still working? Still have over 10 departures per day to 5 cities. I think they may have pulled a couple off because they wanted the airplanes for other stuff like HOU. The only reason we started doing it is because we had customers that would drive all the way to JFK just to ride on JetBlue to FL. They asked for service out of EWR and JetBlue answered. I don't think there are many CAL customers that would drive from Long Island to EWR just to get a flight to Florida. Says something about the product in my opinion. How is CAL doing with all those 757's trying to keep RASM up on those routes?? And Ben, why all the JetBlue bashing?:)
 
Captain Overs said:
CAL is a fine airline. Please disregard any perceived disparaging remarks I may have made in regards to CAL. Carry on.
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Wall Street sure thinks so. So much that CAL stock has pretty much outperformed SWA, FDX, and UPS since about 2003 now. No, if you go back to 1985 and compare CAL stock to FDX, it did not outperform, but the last few years of Wall Street activity and CAL is on top of everybody.

And that is including SWA and FDX

A major/legacy passenger carrier, not in Ch.11, hiring pilots, with a chance to fly heavies to Europe? Make Captain with less than 10 years on? I thought those didn't exist anymore.

Congrats again to CAL, good job guys. The new-hires have alot to smile about.
 
What does one have to say around here to get a question answered? Wait, I know - my airline is better than yours, makes more money than yours, and our FAs are hotter than yours. Geez.

Again, do new hires at CAL receive stock when they are hired? just curious.
 
FlyAuburn said:
What does one have to say around here to get a question answered? Wait, I know - my airline is better than yours, makes more money than yours, and our FAs are hotter than yours. Geez.

Again, do new hires at CAL receive stock when they are hired? just curious.
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Nope, no stock for the newhires.
 
Deerkiller said:
Nope, no stock for the newhires.
Click to expand...

Thanks. Too bad, they would have banked - over $280,000 for each new hire in one year. That's if they would have received a 6,000 share grant with a 1/3 split shortly after being hired. Of course, that would have been to good to be true and the stock wouldn't have gone up that high. I'd give my left tire lugnut to see our stock go up that high too. :D
 

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