« Home

Archive: Nov 2015

  1. US Airlines: Feds vs. AAL DAL UAL LUV

    Leave a Comment

    Roger King, CreditSights (Reproduced with Permission) – Telephone #: +1 (203) 904-8365

    Executive Summary

    • DoJ investigates the potential of noncompetitive behavior in the US airlines industry artificially raising fares.
    • Data shows independent airline capacity initiatives, in fact over-expanding this summer and suffering declining yields.
    • Capacity growth is limited along the east coast by airport constraints and overall by the geriatric air traffic control system.
    • Current industry consolidation was DoJ-approved.
    • Most likely resolution has incumbents giving up some slots in New York and Washington to low-cost carriers.
    • Buy US airlines bonds and EETC tranches—the industry outlook is very positive.

    Relative Value
    Now back from August vacation, the Department of Justice can dig into Senator Blumenthal’s postulation of non-competitive behavior in the US airline artificially raising fares. As unofficial amicus curiae, here are some points for the DoJ to ponder: 1) unit revenues on multi-year decline; 2) real yields remain flat; 3) no direct evidence or behavioral patterns of collusion; 4) airport fees, TSA surcharges, and federal fees keep rising; 5) major airports are capacity constrained; 6) advance fare announcements and capacity outlooks are fundamental to reservation systems and financial analysis; 7) DoJ approved the current industry structure; and 8) DoJ does not understand airline industry fundamentals—the core issue. Most likely, incumbents will give up a few slots at controlled airports and this will be a blip. DoJ might slice a sliver off the expanding pie, but the US airline outlook is very bullish. Buy any senior
    secured note offered, a scarce commodity (See Report: US Airlines: 2Q15 Review and Outlook).

    Share Button
  2. Dry Bulk – “Suicide is Painless”

    Leave a Comment

    In August 2009, we stated in a letter to Shareholders and have commented on since, “We believe the [dry bulk] shipping markets represent a disaster in the making and if the ship has a propeller, it should be sold.” Long-term the dry bulk market is still in trouble, with few solutions for shipowners – and solutions available, shipowners are loath to enact. [“Suicide is Painless” is a line from the movie MASH. the dentist “Painless” recovers by morning. Dry bulk shipping’s survival will not be so quick or easy.]

    Ten more Valemaxes are on the way. China Ore Shipping (“COS”) recently ordered 7 x 400,000 deadweight (“dwt.”) newbuilding Valemaxes. These seven of these vessels are being built at Shanghai Waigaoqiao Shipbuilding (“SWS”) for delivery 2017-2018. COS is a joint venture between China Shipping Group (“CSG”) and China Ocean Shipping Group (“COSCO”). The balance of the order is expected to be ordered from a yard controlled by China Shipbuilding Industry Company (“CISC”). The ships will be chartered to Vale in Brazil as part of a 25 year contract of affreightment (“COA”). As of the end of September 2015, by the end of 2017 nearly 50 million dwt. of Capesize vessels were due for delivery (i.e., approximately 16.0% of the Capesize fleet). An additional 4 million dwt. on the orderbook is not the solution for the dry bulk market and additional orders that may be forthcoming will not improve the dry bulk market.


    Share Button
  3. Bonhams is Having a Scotch Auction!

    Leave a Comment

    Bonhams, the auction house, is holding a scotch auction in New York on November 20th at beginning at 10:00am. A little early to drink in New York and London, but it is past 5:00pm in Hong Kong. – Smile!

    Some really stunning bottles are being auctioned off including: –

    Ardbeg Single Cask 1972
    Distilled 27 Oct 1972, bottled 14 Oct 2004 by Ardbeg Distillery Limited.
    Cask number 2780, Ping No. 1, bottle number 41 of 245. In presentation case. Good label. Level: into neck. 70 cl. Single malt, 51.4% volume


    There’ll be another scramble to Copenhagen when the world gets word of this one…sadly I didn’t get this until just after the last Bible went to press: as an October 2004 bottling this might have won Whisky of the Year, but we’ll never know! 51.4%. 245 bottles for Juuls Vinhande (Denmark). Rated 97. Jim Murray – Whisky Bible”

    The Balvenie 50 Year Old 1952
    In cask 26th January 1952, bottled 5th September 2002. Distilled & bottled by The Balvenie Distillery Company.
    Cask 191. Bottle number 36 of 83. In wooden presentation case. Good label. Level: very top shoulder. 70 cl. Single malt, 45.1% volume

    Bruichladdich 40 Year Old 1964
    Distilled 22nd October 1964 by Bruichladdich Distillery.
    Bottle number 152 of 550. Level: high shoulder. 700 ml. Single malt, 43.1% volume

    The Macallan Millennium Decanter 50 Year Old 1949
    Distilled January 1949, bottled August 1999 by The Macallan Distillers Ltd.
    Caithness Glass, hand blown crystal decanter. In fitted wooden presentation case with copper-clad crystal stopper. Original shipping box. 700 ml. Single malt, 43% volume

    Gary D’Urso, Bonhams, Specialist – Whisky, New York, United States

    +1 917 206 1653
    Fax: +1 212 644 9009
    Share Button
  • Archives

    Jan0 Posts
    Feb0 Posts
    Mar0 Posts
    Apr0 Posts
    May0 Posts
    Jun0 Posts
    Jul0 Posts
    Aug0 Posts
    Sep0 Posts
    Oct0 Posts
    Nov0 Posts
    Dec0 Posts

  • November 2015
    M T W T F S S
    « Oct