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Worries about holiday travel?
Unions are particularly concerned with how the airlines will handle the surge in passengers during the Thanksgiving and December holiday periods.“ We want that flying to get done, but we don’t want tickets sold that...

Worries about holiday travel?

Unions are particularly concerned with how the airlines will handle the surge in passengers during the Thanksgiving and December holiday periods.“ We want that flying to get done, but we don’t want tickets sold that can’t be fulfilled,” he said. “Are they biting off more they can they chew?” And it’s not just the pilots unions complaining that members are at a breaking point due to short staffs and uncertain schedules. 

Unions for flight attendants, mechanics and other employees are also upset about working conditions. Flight attendants joined pilots in complaining about the lack of hotel rooms. And their unions say they are stretched thin and in some cases quitting their jobs due to the alarming number of incidents involving unruly passengers

Those problems won’t be fixed any time soon, predicted Philip Baggaley, chief credit analyst for airlines at Standard & Poor’s “The airlines are trying to navigate a difficult period. They reduced staffing quite a bit during the pandemic. Now they’re ramping back up while the demand situation is somewhat uncertain,” Baggaley said. “It’s certainly not a problem unique to Southwest. It’s a little bit like the supply chain problems that have been publicized elsewhere. "Pilots at both American Airlines and Southwest were already planning informational picket lines at major airports later this year to highlight their grievances about how their airlines are operating. The picket lines, which do not represent a strike or other job action, are scheduled for each of the next three weeks at American. 

The Southwest Airlines Pilots Association filed a suit against the airline in August, arguing that it is violating terms of its labor contract. The union issued a statement Monday blaming this weekend’s problems on management.” What was a minor temporary event for other carriers devastated Southwest Airlines because our operation has become brittle and subject to massive failures under the slightest pressure,“ said Casey Murray, president of SAPA. "Our pilots are tired and frustrated because our operation is running on empty due to a lack of support from the company.” Southwest insists it is doing what it can to support its employees and to accommodate tens of thousands of passengers who were affected by the meltdown. That includes cutting back on its schedule of flights to ensure it has the staff it needs. The airline has “already made significant reductions from our previously published November and December schedules,” Van de Ven said, “and if we think we need to do more, we will.” But Murray told CNN that more hiring and more canceled flights are not the answer.

Southwest Airlines cancellations: What are airline passengers entitled to?

“We don’t want the company canceling flights. We don’t want the company hiring more people to fill in an inefficient scheduling process,” he said. “Until the company corrects some of these issues with how they schedule and reroute pilots and flight attendants, we’re going to continue to see these issues next week and over the holidays. That’s what we want to see avoided.”

Murray denied rumors from over the weekend that the staff shortage was caused by some kind of “sick-out” by Southwest pilots unhappy with operations or the airline’s recently announced mandate that all employees must be vaccinated against Covid. “Our sick rates are right in line to where they were this summer,” Murray said, and the number of pilots signing up for flights is as high as it has ever been, he added.

Contributed by: Chris Isidore, Gregory Wallace and Pete Muntean,

Sold all of $MESA adding to $ERJ.  I was saddened to see one of my favorite planes in such poor condition.  Upon landing, I had a chance to inspect the exterior of the plane and noted several concerning wear and tear items such as an almost worn-out front tire and several dings and burnt spots on the fuselage. The interior of the plane looked like Freddy Krueger and Michael Myers had a fight in first-class and upon landing the entire plane was bucking and vibrating with the overhead compartments looking like they were falling apart. Sad to see indeed however I’m pleased to say that Alaska Airlines operated by Skywest and Delta Connection’s operated by Endeavor Air have a far better-maintained fleet of Bombardier CRJ900s.

When a CEO comes on TV to clean up and says “Our people are doing an amazing job” when “the people” are singing another tune you know something is broken.
The reality is the model has broken with management shying away from addressing front lines,...

When a CEO comes on TV to clean up and says “Our people are doing an amazing job” when “the people” are singing another tune you know something is broken.  

The reality is the model has broken with management shying away from addressing front lines, logistics, scheduling, and of course pay. Scaling up to meet demand and then having to cancel or reschedule due to labor shortages with overworked staff trying to keep up and burning out. 

I like $LUV and I’m kind of sad to see them shy away from these issues. Better to face the truth than let shareholders decide for you and by the way they saw this coming remember what happened in June?

Editor

Seems like Carter promises $5 gas prices circa 2008.

Seems like Carter promises $5 gas prices circa 2008.

$SPY Sept - Oct one hell of a ride so far!

$SPY Sept - Oct one hell of a ride so far!

Simply explained you have a credit card with a balance of 27 trillion and rising while your income is dropping.

Simply explained you have a credit card with a balance of 27 trillion and rising while your income is dropping. 

• Rising inflation has an insidious effect: input prices are higher, consumers can purchase fewer goods, revenues, and profits decline, and the economy slows for a time until a measure of economic equilibrium is reached.
• Value stocks perform better...
  • Rising inflation has an insidious effect: input prices are higher, consumers can purchase fewer goods, revenues, and profits decline, and the economy slows for a time until a measure of economic equilibrium is reached.
  • Value stocks perform better in high inflation periods and growth stocks perform better during low inflation.
  • When inflation is on the upswing, income-oriented or high-dividend-paying stock prices generally decline.
  • Stocks overall do seem to be more volatile during highly inflationary periods.
When identifying a trade its important to understand the different types of moving averages:
Let’s start with the WMA. The Weighted Moving Average puts more weight on recent data and less on past data. This is done by multiplying each bar’s price by...

When identifying a trade its important to understand the different types of moving averages:

Let’s start with the WMA.  The Weighted Moving Average puts more weight on recent data and less on past data. This is done by multiplying each bar’s price by a weighting factor. Because of its unique calculation, WMA will follow prices more closely than a corresponding Simple Moving Average.

Now lets tackle the ones I like to use. The Exponential Moving Average (EMA) is similar to Simple Moving Average (SMA), measuring trend direction over a period of time. However, whereas SMA simply calculates an average of price data, EMA applies more weight to data that is more current. Because of its unique calculation, EMA will follow prices more closely than a corresponding SMA.

Here is a breakdown of my EMA settings:

5 Day EMA: This is a sign of strong momentum. It tracks the trend in the short term time frame. This is support in the strongest up trends. This line can only be used in low volatility trends with strong momentum. A break back above this line is a sign for me that an uptrend may be resuming. I primarily use it as an end of day trailing stop. It is rare that this line does not break intraday, even in the strongest trending markets.

10 day EMA: The 10 day EMA is a great moving average to use to keep you on the right side of the major market trend. It is usually the first line to be lost before any real trouble begins. It can be used as a standalone signal in some stocks and markets that tend to trend strongly in one direction for long periods.

21 day EMA: This is the intermediate term moving average. It is generally the last line of support in a volatile uptrend. To me, it is the inevitable reversion to the mean in a market when it finally pulls back after an extended trend.

And finally my favorite the SMA is the easiest moving average to construct. It is simply the average price over the specified period. The average is called “moving” because it is plotted on the chart bar by bar, forming a line that moves along the chart as the average value changes.

Here is a breakdown of my SMA settings:

50 day SMA: This is the line that strong leading stocks typically pull back to. This is usually the support level for strong uptrends. It is normal for up trending markets to pull back to this line and find support. Most bull markets and uptrends will pull back to this level. It is generally a great “Buy the dip” level.

100 day SMA: This is the line that provides the support between the 50 day and the 200 day. If it does not hold as support, there is a high probability that the 200 day SMA is the next stop. This is the deeper pullback level in bull markets and uptrends. It usually presents a great risk/reward ratio in bull markets.

200 day SMA: Bulls like to buy dips when markets are trading above the 200 day moving average, while bears sell rallies short below it. Bears usually win below this line, as the 200 day becomes longer term resistance, and bulls buy pullbacks to the 200 day as long as the price stays above it. This line is one of the biggest signals in the market telling you which side to be on. Bull above, Bear below. Bad things happen to stocks and markets when this line is lost.

Remember: Moving averages are not the Holy Grail of trading. They are tools to help a trader capture a trend in their own time frame they work best in low volatility markets.

Editor 

What is WACC and ROIC and how to value a company.
WACC is an acronym for the weighted average cost of capital. The WACC represents a blend of costs of capital across all sources.
The sources include common shares, preferred shares, and debt. Its...

What is WACC and ROIC and how to value a company.

WACC is an acronym for the weighted average cost of capital. The WACC represents a blend of costs of capital across all sources.

The sources include common shares, preferred shares, and debt. Its percentage of total capital weighs the cost of capital and is then added together.

The WACC is a mash-up of both debt and equity and its weights, comparatively, and many use the WACC as a discount rate for financial modeling.

The WACC also acts as a minimum expected return in a discounted cash flow and other valuation methods such as a dividend discount model and an excessive return model.

The WACC includes in its formula:

Beta - Equity risk premium - Risk-free rate - An average yield of debt and taxes

As we can see, WACC takes elements of your investment’s equity or risk and the impact of debt and its interest payments.

The formula for WACC below:

WACC = (E/V x Re) + (D/V) x (Rd x (1 – T))

And the inputs:

E = Market Cap

D = Market Value of the Company’s Debt

V = Total value of Capital = Equity plus Debt

E/V = % of capital that is equity

D/V = % of capital that is debt

Re = Cost of equity or required rate of return

Rd = cost of debt or yield to maturity on existing debt

T = tax rate

The purpose of WACC is to determine the cost of each part of the company’s capital structure based on the portion of equity, debt, and preferred stock of the company.

Each component of the formula has a cost to our company. Each company pays a fixed rate of interest on its debt and preferred stock.

Even though a company doesn’t pay a fixed rate on its equity, it may pay dividends in the form of cash to its stockholders.

On the other side is the ROIC, or return on invested capital. The ROIC is a profitability or performance ratio that measures the percentage return that a company earns on invested capital.

The ROIC tells us how efficiently a company is using the investor’s monies to generate income. Companies like to use ROIC as a benchmarking to calculate the value of competitors.

We calculate ROIC by taking the cost of investment and the returns generated from that investment. The returns are all the earnings after taxes but before interest payments. We calculate the investment by subtracting all current long-term liabilities from the assets.

The investment cost is either the total assets required for the business or the amount of financing raised by debt or equity sales.

Next, we divide the return by the cost of investment.

Return on Invested Capital (ROIC) = Net Operating Profit After Tax (NOPAT) / Invested Capital. NOPAT is also equal to EBIT x (1 – tax rate)

In conclusion both formulas look at both the cost of equity and the cost of debt, they tell us how much those costs equal the rate of return we should expect. But if the ROIC is greater than the WACC, then the company is creating value because the company is investing in value-creating projects. Yet, if the ROIC is lower than the WACC, then the company is destroying its value because the projects it is investing in are lower than the costs of funding that project.

Editor

#themoreyouknow

$SHIB the next $DOGE

$SHIB the next $DOGE 

Oh yes it’s coming.

Oh yes it’s coming.

How finance executives can provide greater strategic value?

Continuous recalibration.

The world isn’t standing still. Organizations need to quickly move from planning to execution to analysis, and be prepared to restart that cycle with each new opportunity or challenge. Hallmarks of this approach include a shift from annual budgeting and planning to more agile, flexible, continuous forecasting, thus enabling faster analysis, decision making and execution. This approach also allows for ongoing rebalancing of resources to address market changes, tackle new opportunities, or place big bets.

Run in the now.

An organization can’t run at the speed it needs if silos exist between teams and outdated systems delay action and decisions. To run in the now, businesses must break down their silos to operate seamlessly in real time. This will equip decision-makers with a 360-view and position them to anticipate challenges and respond quickly.

Mitigate uncertainty with the full picture.

To make the best decisions, data needs to be available to those who can take action. Build a data hub to unify financial, people and operational data and give all teams transparent access so insights are shared across the organization.

Rewire processes in days.

Technology needs to work for business, not the other way around. Embrace systems that allow business owners to quickly change processes to reflect new needs, without costly or time-consuming development. Embrace a change of mindset and culture of agility to empower leaders to respond to challenges and make changes in real-time. Align staff skills with the needs of the future.

Shape a new future.

No one can predict the future, but finance teams should run multiple scenarios to predict how different levels of investment or resource allocations could impact outcomes. These actionable insights let finance teams and the overall organization make better, more timely decisions as conditions shift.

Elevate human performance.

Use automation and machine-learning–assisted decision making to free teams for higher-value tasks and strategic planning, and ensure that the tools they use to perform their jobs deliver an engaging experience. Together, this empowers people to focus on higher-value work and not on repetitive tasks that slow them down.

Measure real-world impact.

Just as the approaches and tools of yesterday won’t solve tomorrow’s challenges, neither will yesterday’s KPIs. Establish clear milestones and build new metrics to define and measure the success of digital transformation —but remain open to changing course.

Editor

Ai rewriting the rules of aviation.

Next-gen software is redrawing the routes planes fly between airports, avoiding traffic jams in the sky and saving Alaska Airlines millions of dollars.

“We’re getting an outsized benefit right now because we’re the only airline that’s using the software,” said Pasha Saleh, flight operations strategy and innovation director for Alaska Airlines. “That means we get to design these bespoke routes for ourselves while everyone else is essentially relegated to the traditional paths that human dispatchers come up with unaided.”

In the past, when a Los Angeles-bound Alaska Airlines plane flew out of Anchorage, the carrier padded the flight schedule to include extra time in case of surprise delays. Yet in recent months Alaska has trialed a new route-mapping software from the startup Airspace Intelligence. The software suggests paths in the sky that are tailored to real-time weather and traffic and may be more desirable. Passengers may soon see arrival times are more accurate.

Experts predict that flight dispatching at airlines worldwide will improve with the help of powerful number-crunching software that uses artificial intelligence, or AI.

Today, the typical airline flight dispatcher essentially plans the route that an aircraft will take between airports by doing a bit of math, picturing in their head what storm data on radar might mean for a flight’s trajectory — while using route maps that planes have flown before as inspiration.

“Before this job, I was a professional pilot for a while,” Saleh said. “I can’t tell you how many times I’ve been taking off early ahead of schedule, telling my passengers the whole way, ‘We’re going to get you there 20 minutes early,’ and then we ended up arriving 40 minutes late. The use of AI software by all airlines could reduce how often that happens.”

Alaska Airlines may have found a better way. It recently has been piloting software called Flyways AI. The software predicts extreme weather and air traffic with greater accuracy. The intel helps dispatchers create flight plans less prone to revision. That precision, in turn, enables the airline to trim its fuel use and make its operations more predictable and cost-effective.

“Eventually, most airlines will deploy AI for flight dispatch,” Saleh said. “So our total savings in time between point A and point B on our average flight may not be as much once others copy the technique. But we’ll still enjoy lasting gains in average fuel savings, a reduced CO2 [carbon dioxide] emission footprint, and the operational knock-on effects of greater predictability about flight arrival times.”

After a six-month pilot with the software that began around December, Alaska reduced its fuel use by 480,000 gallons and trimmed nearly 4,600 tons of carbon dioxide emissions.

AIRLINES EMBRACING ARTIFICIAL INTELLIGENCE

The carrier’s move is part of a larger trend. Until recently, travel companies haven’t used much artificial intelligence, besides setting prices, buying ads online, and offering automated customer service.

But step by step, travel companies are experimenting with ways to use computational artificial intelligence, similar to the software companies such as Amazon use to crunch numbers quickly to make predictions that can make operations, such as delivery logistics, more efficient.

“Every flight has its route first planned by a dispatcher, but each dispatchers sort of works in isolation and doesn’t know everything that everyone else is doing,” Saleh of Alaska Airlines said. “So very often unintentionally, one dispatcher’s flight plan creates conflicts with others’, and plans from different airlines can conflict, too.”

“That’s how you can end up with ten flights arriving at SeaTac [Seattle-Tacoma’s main airport] within five minutes,” Saleh said. “Better predictions can help airlines avoid that, essentially showing the impact of one dispatcher’s decision on every other flight.”

Airlines use flight-planning software from vendors or in-house. Widely used systems include Boeing’s Jeppesen, Sabre’s Flight Plan Manager, airline owned tech provider SITA [Société Internationale de Télécommunications Aéronautiques] (though it is pulling out of flight planning), Leidos‘s 1800wxbrief (which offers related services for flight dispatchers), Lufthansa Systems’ Lido Flight 4D, and Airbus’ Navblue N-Flight Planning.

Alaska uses Jeppesen.

“If our dispatcher likes the route recommended by the Flyways software, they essentially copy and paste the data into the Jeppesen system, which is already FAA [Federal Aviation Administration] approved,” Saleh said. “So we avoid needing regulatory approval or spending a lot of money swapping out systems because the Flyways isn’t mission-critical and is just a decision-support tool. The dispatcher can do their job even if the recommendations stop coming for some reason.”

Flight dispatchers have multiple tabs open on their computers in Alaska’s network operations center. One of those tabs is now the startup’s browser-based recommendations. They suggest where a plane should climb or drop in altitude and what paths it could optimally take — using dynamic mapping across a time scale.

Landing planes more predictably with fewer surprises can help in other ways besides saving fuel and pleasing passengers. Greater predictability can enable airlines to be more accurate about planning their labor needs for flight crews, for instance.

After takeoff, an airport’s air traffic control tower passes the job of managing the flight to controllers at regional centers, which typically hand flights to other centers until an aircraft reaches its destination. All of these centers for all airlines could theoretically benefit from more accurate predictions about when storms or traffic might block certain “lanes” in interstate “skyways.”

Saleh recalls an “ah-ha” moment he had when he knew the use of artificial intelligence would have promise.

“Before the pandemic, Ben Minicucci — now our new CEO but then still the president of the company — came by to have a look after the team had trialed it and offered feedback to the developers for about a year,” Saleh said. “Ben said it was game-changing that we were the first airline to get this. So for even someone at his level, who has to think about such a broad operation, it wasn’t lost on him that this software represented a real opportunity.”

I thought I was dreaming the other day while at our local Costco ($COST) .

I walked past a freezer full of beef, and was startled by the sign on it. In fact, it made me stop in my tracks. That freezer was full of Wagyu beef, and the sign indicated a price of $99.99/pound. I had to look further, opened the door, and saw individual and multipack steaks selling for $180, $200 and up.

I later confirmed on Costco’s website that they do indeed sell wagyu, it was not a dream. Want a six-pound A5 grade Japanese Tenderloin Wagyu Roast? That will set you back $999.99. Interestingly, it comes with a certificate of authenticity.

Costco has gone upscale, and I wonder if consumers are actually paying that much for a steak? Furthermore, I wonder if it’s worth the price. Can’t say I’ll find out anytime soon.

Another takeaway from a Costco excursion, and you can call me “Captain Obvious,” but inflation is becoming very real. A much-coveted case of Mexican Coke, which comes in 12-ounce glass bottles, is made with sugar and not corn syrup, and tastes much better than the corn-syrup version, will now set you back $25.59. A few months back I paid $21.99. Now that price increase, 16.3% to be exact, could be caused by a lot of factors including increases in input and shipping costs, and supply chain issues. But it still represents inflation, and is unlikely to get better anytime soon.

That pound of boneless chicken breast at one of our local grocery stores, which has been priced at $1.99 for years, is now $2.09, a 5% increase at that price, I’m sure it a loss-leader for the store. I don’t need to mention gas prices, yet wonder what will happen this winter in the Northeast with heating oil and natural gas, especially if its an extremely cold one.

The massive amount of stimulus over the past year and a half, easy money policy, and crazy deficit spending, points to an extended period of inflation. I think the Fed will act sooner than 2023 to raise rates. Extended inflation above the 2% target remains one of their greatest fears.

Here’s hoping that we don’t return to the 1970’s and early 1980’s inflation eras. As a kid in the 70’s, it meant shortages. We re-used paper lunch bags, switched to powdered milk for a while, and waited in gas lines. The lines outside the coin/precious metals store were also something to behold, as consumers sold their gold and silver coins to raise cash.

Editor

A truly sustainable IPO!
Allbirds uses recycled and natural materials like wool, tree fiber and sugarcane to reduce its carbon impact. The brand has also committed to becoming carbon-neutral, meaning that for every ton of carbon the company emits,...

A truly sustainable IPO!

Allbirds uses recycled and natural materials like wool, tree fiber and sugarcane to reduce its carbon impact. The brand has also committed to becoming carbon-neutral, meaning that for every ton of carbon the company emits, they will pay to “take” a ton of carbon out of the atmosphere by purchasing credits from third-party emission reduction products, known as “carbon offsets.“

With a running shoe with a carbon footprint of less than 3 kilograms of carbon dioxide equivalent emissions (CO2e) per pair, is a considerable achievement: The average running shoe generates about 12.5 kilograms of carbon dioxide emissions, as calculated by Allbirds in a 2013 MIT study found that a "typical pair of running shoes” generates “30 pounds of carbon dioxide emissions,” which translates to 13.6 kilograms.

The company had 27 stores as of June 30, and it plans to make a much bigger push into bricks and mortar in the future. Allbirds said it is in the “early phase of a ramp towards hundreds of potential locations.”

Allbirds has a loyal following. Repeat customers accounted for 53% of its sales last year, up from 46% in 2019, the company said. Its fans also spend more money over time. A repeat customer’s average spending grows by more than 25% in the second year they shop the brand, Allbirds said.

Allbirds said it has applied to list its Class A common stock on the Nasdaq exchange under the ticker symbol $BIRD.

Source Material: NBC 

Editor