New technology is leading to changes in business relationships between airlines and online ticketing sites. It'll take a while for the new landscape to settle down, but the near-term result could be potential windfalls for some carriers -- and confusion for air travelers.

Continue reading Who Wins in the Dispute Between Airlines and Online Ticket Sites?

Who Wins in the Dispute Between Airlines and Online Ticket Sites? originally appeared on DailyFinance on Tue, 01 Feb 2011 09:00:00.

The International Air Transport Association expects airline profit to plunge 40% this year as fewer passengers travel during the recession and as fuel prices rise. But that doesn't mean you'll necessarily be able to score a good deal: Airfares are likely to keep climbing.

Continue reading 2011 Airline Forecast: Airfares Will Climb as Profits Plunge

2011 Airline Forecast: Airfares Will Climb as Profits Plunge originally appeared on DailyFinance on Tue, 14 Dec 2010 19:45:00.

Airlines plan to nearly triple the number of airplanes equipped with in-flight Internet access this year, but fewer than one in 50 passengers currently pay for the service. Analyst project that prices will fall and more passengers will sign on. When will WiFi revenues start to take off?

Continue reading WiFi in the Sky: Airlines Bring More Internet Access on Board

WiFi in the Sky: Airlines Bring More Internet Access on Board originally appeared on DailyFinance on Sat, 28 Aug 2010 10:00:00.

Separately, United and Continental's frequent flier programs are among the most robust loyalty programs in the business, allowing passengers to earn and spend miles in a variety of ways. Combining the two will create a powerhouse program.

Continue reading United-Continental Merger: Frequent Fliers Will Be Pleasantly Surprised

United-Continental Merger: Frequent Fliers Will Be Pleasantly Surprised originally appeared on DailyFinance on Mon, 03 May 2010 15:45:00.

From page 50 of the report:

Note the last line, "Present value of future expenditures in excess of future revenue" (over a 75 year period). The figure is $7.2 trillion.

The report also has some interesting information about contingent liabilities [1] [2]. See Notes 18 and 19 (pages 99-101).

Results included $4.5 million in system conversion and merger-related expenses. After taxes, these expenses reduced the net income of $28.0 million by $3.1 million or 1 cent per share in the reported quarter. Net margin was sequentially flat at 3.1% although it declined from 3.55% in the prior-year quarter.

Non-interest expense increased 4.3% sequentially and 2.4% year-over-year to $172.2 million. Total interest income declined 2.3% sequentially and 11.7% year-over-year to $187.5 million due to decrease in wealth management, commercial, residential mortgage and consumer loan interests.

For full year 2009, People’s United’s net income totaled $101.2 million or 30 cents per share as compared to $137.8 million or 42 cents per share for 2008. Core commercial and home equity lending portfolios increased 5% and deposits grew 8% year-over-year. Net margin declined to 3.19% from 3.62% in 2008 due to higher non-interest expenses and loan loss provisions.

Credit Metrics

During the reported quarter, net loan charge-offs totaled $13.6 million, increasing drastically by 138.6% year-over-year although declining 15% sequentially. Net loan charge-offs as a percentage of average loans on an annualized basis were 0.38% compared to 0.44% in third quarter of 2009.

At Dec 31, 2009, People’s United’s non-performing loans totaled $168.8 million and the ratio of non-performing loans to total loans was 1.19%, compared to $175.7 million and 1.23%, respectively, at Sep 30, 2009, reflecting marginal stability. However, this was significantly higher compared to non-performing loans of $84.3 million and the respective ratio of 0.58% as on Dec 31, 2008.

Non-performing assets totaled $205.6 million at Dec 31, 2009, up $12.9 million from Sep 30, 2009. Non-performing assets were 1.44% of total loans, REO and repossessed assets at Dec 31, 2009 as compared to 1.35% at Sep 30, 2009, primarily reflecting a decline in the market value of fixed-income assets due to an increase in interest rates.

At Dec 31, 2009, the allowance for loan losses as a percentage of total loans was 1.21%, while as a percentage of non-performing loans was 102%, compared to 1.21% and 98%, respectively, at Sep 30, 2009.

Profitability Metrics

For the fourth quarter of 2009, return on average tangible assets was 0.51% and return on average tangible stockholders' equity was 2.8%, compared to 0.55% and 3.0%, respectively, for the third quarter of 2009. At Dec 31, 2009, People's United's tangible equity ratio stood at 18.2% while tangible book value per share decreased to $10.68 from $10.86 at the end of 2008.

Dividend Update

The Board of People's United Financial declared a $0.1525 per share quarterly dividend, payable on Feb 15, 2010 to shareholders as on Feb 1, 2010. Based on the closing stock price on Jan 20, 2010, the dividend yield on People's United Financial common stock came in at 3.7%.

People’s United also expects to complete the pending acquisition of Financial Federal by mid-Feb, 2010.

Overall, People’s United is desperately trying to overcome the challenging economic environment through opportunistic acquisitions, stable net interest margin, modest loan growth and lower net loan charge-offs.

However, the company’s operating leverage and balance sheet remains sensitive to weak credit quality, increasing loan loss provisions, non-interest expenses against decreasing interest income. We believe the historically low interest rate environment is expected to have a negative impact on People’s United for some more time before it rebounds with the slowly recovering economy.