In this battle between Big Oil and Big Corn, the Philly refiners have been the most effective players in the fight, Reuters reported last week, after comparing White House lobbying records to changes in federal fuel policy and ethanol costs.

Brady was joined in the cause by U.S. Rep. Patrick Meehan (R., Pa.). They had worked together on the campaign to recruit the new refinery operators, after Sunoco and other old-time refiners gave up and shut down.

Brady’s staff says he’s not against all biofuels, just ethanol. He agrees with oil lobbyists that it’s a wasteful use of corn.

But not all the local business or political establishment is lined up with Big Oil.

The DuPont Co. in Wilmington has joined with rival plant and pesticide developer Monsanto, grain shippers, and farm industry groups to support federal policies that favor biofuels, including ethanol.

At last week’s Biotechnology Industry Organization show at the Convention Center, Big Oil was slammed as a barrier to planetary progress.

“The oil-refining industry is trying to discourage development of biotech infrastructure,” charged Jim Greenwood, the former Republican congressman from Bucks County, in the group’s plenary session Tuesday.

“Just like Thomas Edison and his allies fought off (Standard Oil Co. monopolist John D.) Rockefeller’s attempt to derail electricity, we are fighting off efforts to stop renewable fuels,” Greenwood thundered. “And I promise we will be as successful.”

One of the week’s honorees, DuPont chief executive Ellen Kullman, rose next to tell how her predecessor at DuPont, Charles “Chad” Holliday, drafted her 15 years ago to unite chemists and industrial biologists to turn science research into real-world products. The chemists felt “threatened” by biotech. The biotech people’s “veins used to bulge when the chemists came into the room,” Kullman recalled.

But they learned to cooperate. And DuPont was determined to shed drug and chemical businesses to “follow the science” into biotech, Kullman said.

The hardest part, Kullman added, has been building a new supply chain linking raw materials, developers, engineers, processors, marketers, and distributors.

“We’re competing with petroleum-based supply chains that have had 100 years to figure it out,” she said.

Kullman cheered DuPont’s advances in cellulosic ethanol, which uses wood or weeds or farm waste instead of corn. But she also defended the EPA’s rising ethanol mandate: “I call on Congress to renew it,” she said. “It is about reduced dependence on fossil fuel. It is about independence. It is about jobs. I like that kind of return on investment.”

But even when a new technology is superior, it’s hard, and costly, to change old habits, minds, and relationships, Kullman said. So hard, she added, that “great change in technology can’t occur without government support.”

JoeD@phillynews.com

215-854-5194 @PhillyJoeD

www.inquirer.com/phillydeals

With all the ready-to-rent, easy-peasy SaaS software products on the market, the conventional wisdom has become that you’d be nuts to build your own software. For one thing, companies can sign up and pay for SaaS out of operating, not capital budgets, which has accounting advantages. For another — hey, it’s easy, and face it, software developers don’t come cheap.

But a couple interesting cases cropped up this week, with two big companies bringing more software development and related work back in-house. First, CIO Journal reported (registration required) that Facebook is building its own sales software internally, according to Facebook CIO Tim Campos. It will tie into Facebook’s existing Salesforce.com account, but Facebook will run the system.

And on Thursday, The Wall Street Journal reported (registration required) that Delta Airlines is buying data and intellectual property from Travelport LP so that it can control and manage — and presumably enhance and modify as needed – its own operational and reservations system, according to CEO Richard Anderson.

The argument for buying

At MIT’s CIO Symposium this week, ThomasNet CEO Mark Holst-Knudsen said the biggest mistake of his career was when he approved the building of some software when the company should have bought it. His takeaway, as reported earlier:

“‘You shouldn’t build anything that’s available off the shelf that’s not the source of competitive advantage,’ he noted. For ThomasNet, that advantage lies in its system for managing product and CAD information, which enables it to build product catalogs with specifications that can then be transmitted to distributors with different ERP requirements.”

It’s the definition of “core competitive advantage” that gives big companies wiggle room here, and some will doubtless hear the siren call of vendors who say it’s time for big companies to re-invent themselves through bold new software products.

No one could argue that Facebook’s core expertise lies in developing massively scaled infrastructure and the software that runs atop them, but the decision still flies in the face of convention that holds companies should buy what they can and reserve their BYO chops for the most core, valuable assets. As for Delta, I guess the reservations system is the epitome of core. But again, hiring on software expertise is a very expensive proposition in this day and age.

ROI is a tricky calculation

When it comes to Return on Investment (ROI) calculations on buy versus build, anything can happen. For one thing, all that SaaS software isn’t exactly cheap — and most SaaS vendors require at least a one-year buy in (and push for three years). For 100 users, Salesforce.com’s Enterprise edition lists for $150,000 per year. Many SaaS purchases are eerily reminiscent of the old enterprise software sales cycle that the SaaS players said they wanted to disrupt.

The IT executive of a large Bay Area company, who requested anonymity because he is not authorized to speak on buying decisions, told me his company did the math and concluded that creating its own cloud infrastructure out of open-source software was an attractive way to minimize VMware licensing costs. And it gives the company a way to build exactly what it needs without being constrained by vendor strictures.

When it comes to applications, he added, it’s not always a given that off-the-shelf packaged software is less pricey than building your own, but that has to be considered on a case-by-case basis.

The siren call of new and shiny apps

The ability to build and field truly new applications is a benefit that Pivotal CEO Paul Maritz has been hammering on for the last year. He paints Pivotal’s big data platform as the foundation for next-generation applications that could open up new revenue streams for companies. Speaking at Structure Data in March, he said rather ominously that for some companies in hyper-competitive markets, there is no option.

 “Some players…have clear enough line of sight to competitive opportunities that they’re willing to build afresh, leave IT legacy behind and build a new platform,” he said. “There’s nothing like the gallows to focus the mind.”

The demand for new, built-from-scratch applications will be one topic on tap for discussion with Scott Yara, president and head of products at Pivotal, at Structure next month in San Francisco.

While no major changes in the stock price performance were registered in the past one week, trends mostly remained bearish for Airline stocks.

Among the major events that vied for attention, Delta Airlines Inc. (DAL) and Southwest Airlines Co. (LUV) reported hikes in investor returns while GOL Linhas Aereas Inteligentes S.A. (GOL) posted wider-than-estimated loss.  
Recap of the Past One Week’s Most Important Stories

1.    JetBlue Airways Corporation (JBLU) registered strong traffic growth in April, up 6.1% year over year, representing the third consecutive month of high traffic. Consolidated capacity was also up 5.9% year over year and load factor grew 20 basis points. (Read More: April Traffic Flies High at JetBlue)

2.    Within a year of enhancing its shareholders’ return, Delta Airlines again hiked its dividend and authorised a new share repurchase program to gain investors’ confidence. The company’s board of directors approved a $2 billion share buyback program through 2016 and raised quarterly dividend by 50%. (Read More: Delta to Boost Shareholders Wealth)

3.    Southwest Airlines enhanced its shareholders’ wealth, just days after rival Delta Airlines increased its own, by approving a $1 billion share buyback program and a 50% hike in its quarterly dividend. This marks the company’s 151st consecutive dividend pay-out. The new amount represents an annualized dividend of 24 cents and a yield of around 1%. (Read More: Southwest Airlines to Boost Shareholder Wealth)

4.    GOL Linhas reported its first quarter financial results that were hurt considerably due to a decline in domestic supply, record high jet fuel prices and depreciation of the Brazilian real against the dollar.

The company posted loss that was wider than the year-ago quarter number as well as the Zacks Consensus Estimate. (Read More: GOL Q1 Loss Wider than Expected). The company also reported its traffic results in which it recorded a rise in load factor to 76.8%.

5.    In line with airline customer satisfaction scaling new heights in North America, Alaska Airlines Group Inc. (ALK) topped the 2014 survey conducted by J.D. Power for the seventh consecutive year. The carrier also earned the leading position in terms of quality and usability of its frequent flier program. (Read More: Alaska Airlines Tops Satisfaction Survey)

Performance

The following table shows the price movement of the major Airline players over the past 5 trading sessions and during the last 6 months:
 

Over the trailing 5 days, most of the airline stocks witnessed a plunge except for JetBlue Airways, Southwest Airlines and Hawaiian Holdings Inc. (HA).

Of these positively performing stocks, JetBlue Airways ranked highest with almost 1% gain in stock prices over the trailing 5 days. However, Hawaiian Holdings and Southwest Airlines gained marginally.

On the other hand, the biggest losers include GOL Linhas, United Continental Holdings, Inc. (UAL), Delta Air Lines and American Airlines Group Inc. (AAL), stocks of which dropped 6.9%, 3.6%, 1.59% and 1.5%, respectively, over the last 5 trading sessions.

On the other hand, in terms of performance over the past 6 months, most of the stocks have fared reasonably well with the exception of Copa Holdings SA (CPA), which dropped 6.43% over the period. The biggest gainer in the 6-month span was Hawaiian Holdings sporting substantial growth of 77.5%.

What’s Cooking in the Airline Biz?

The beginning to the current week witnessed some key events in the industry. While Southwest Airlines announced its plans to extend its international destinations apart from adding new non-stop flights from Dallas Love Field, Alaska Airlines is now looking for regulatory approvals to kick start two new non-stop flights from Portland, OR, to Los Cabos and to Puerto Vallarta, Mexico.

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• Professional Services
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• Delta Airlines
• JetBlue Airways
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Delta Airlines will launch a direct flight from the Lincoln Airport to the world’s busiest airport, Atlanta’s Hartsfield-Jackson International.

The flight starts Sept. 8, providing Nebraska travelers more connections to the Southeast and international destinations. Delta already provides several direct flights daily from Omaha’s Eppley Airfield to Atlanta.

Lincoln Airport officials said the new flight schedule will be convenient for business travelers, leaving Lincoln at 7 a.m. Central time and arriving in Atlanta at 10:17 a.m. Eastern time. The return flight leaves Atlanta at 7:15 p.m. and returns to Lincoln at 8:42 p.m.

Delta operated a similar flight in 2009, but an inconvenient schedule deterred passengers from taking it, said John Wood, executive director of the Lincoln Airport.

He said the airport is making the flight available again through a $750,000 federal grant that will provide Delta guaranteed revenue. However, if travelers support the service, the funds won’t be necessary, he said.

“We know there’s a demand for service to the Southeast, we expect fares to be competitive and we have a convenient schedule,” Wood said. “We believe that combination will put passengers on the planes.”

Delta Airlines will launch a direct flight from the Lincoln Airport to the world’s busiest airport, Atlanta’s Hartsfield-Jackson International.

The flight starts Sept. 8, providing Nebraska travelers more connections to the Southeast and international destinations. Delta already provides several direct flights daily from Omaha’s Eppley Airfield to Atlanta.

Lincoln Airport officials said the flight schedule will be convenient for business travelers, leaving Lincoln at 7 a.m. Central time and arriving in Atlanta at 10:17 a.m. Eastern time. The return flight leaves Atlanta at 7:15 p.m. and returns to Lincoln at 8:42 p.m.

Delta operated a similar flight in 2009, but an inconvenient schedule deterred passengers from taking it, said John Wood, executive director of the Lincoln Airport.

He said the airport is making the flight available again through a $750,000 federal grant that will provide Delta guaranteed revenue. However, if travelers support the service, the funds won’t be necessary, he said.

“We know there’s a demand for service to the Southeast, we expect fares to be competitive, and we have a convenient schedule,” Wood said. “We believe that combination will put passengers on the planes.”

Following its competitors Delta Airlines and United Airlines, American Airlines last month announced changes for redeeming miles on its AAdvantage frequent flier program. AAdvantage members need to get crackin’ if they want to redeem miles at current rates; the new, largely less favorable program kicks in on June 1.

Not only is the new system costlier for fliers, it’s also a lot more complicated. That’s because it combines the current AAdvantage program with the Dividend Miles frequent flier program of US Airways, which American formally acquired last December.

The two airlines have been integrating by bits and pieces since. Although the Dividend Miles program will continue to exist, at least for the time being, the two programs will essentially have the same rewards.

Changes ahead for the mileage program of the new American Airlines. (Photo credit: Aero Icarus)

To illustrate, let’s play “one of these things is not like the other.” Both airlines are getting rid of three-tiered redemption systems. American’s program of two “MileSAAver” plans currently offers better deals but limited availability, while “AAnytime” miles have no blackout dates but require significantly more miles. Dividend Miles redemption rates are based on demand.

Here’s the mileage required for domestic round trip tickets in economy class under each of the old programs:

 American AAdvantage          US Airways Dividend Miles

To Europe, as an example, economy class rates currently look like this:

 American AAdvantage          US Airways Dividend Miles

On its European routes, US Airways also currently has an “off-peak” level, 35,000 miles round trip.

Going forward, each airline’s three-tier systems are giving way to five choices in each class of service. MileSAAver and AAnytime categories are being further divided into numbered “levels” based on timing and flight load.

For domestic travel, the new rates mirror the current Dividend Miles program – bad news for AAdvantage members. MileSAAver awards, the best deal, will be available in limited quantities and usually far in advance.

New AAdvantage Mileage Requirements:

U.S. Domestic Round Trip Tickets

Fliers foresighted – or lucky – enough to snag lowest tier tickets won’t notice much change, but AAnytime fliers should pray that the flight isn’t already well sold; otherwise they’ll be shelling out 10,000 more miles than they used to. There’s also an AAnytime Level 3, for “peak of the peak” times like holiday weekends. These rates are unannounced, which makes me think of seeing “market price” next to lobster on a restaurant menu (read: “if you have to ask, you probably can’t afford it”).

To Europe, the new chart looks like this:

New AAdvantage Mileage Requirements:

U.S. to Europe Round Trip Tickets

Its
Southwest Airlines Co.

‘s (
LUV

) turn now to enhance its shareholders’ wealth just days after
rival
Delta Airlines Inc.

(
DAL

) increased its own. The airline’s board of directors has approved
a $1 billion share buyback program along with a 50% hike in its
quarterly dividend to 6 cents per share from the prior-paid 4
cents.

The $1 billion share repurchase authorization includes a $200
million buyback program to be completed on an accelerated basis.
Meanwhile, this is the 151st consecutive dividend payout for
Southwest Airlines, which translates into an annualized dividend of
24 cents and a dividend yield of around 1%. The hiked dividend will
be paid on Jun 25, 2014 to shareholders of record on Jun 4,
2014.

Recently, the company completed its previous $1.5 billion share
repurchase program, which also included a $200 million accelerated
share buyback launched in Feb 2014. During the first quarter of
2014, Southwest Airlines paid $56 million in dividends and
repurchased 12 million shares for an approximate amount of $315.0
million.

This latest bid to enhance shareholders’ return depicts
Southwest Airlines’ confidence in continuing its sturdy financial
performance, already reflected in the impressive first-quarter
results. To us, the increased shareholders’ return does not come as
a surprise. The company’s bottom line has managed to beat the Zacks
Consensus Estimate in the past three quarters with an average
surprise of 8.51%.

Southwest Airlines is the second major air transportation
carrier after Delta Airlines in terms of dividend payment as other
traditional carriers like
United Continental Holdings Inc.

(
UAL

) and
JetBlue Airways Corporation

(
JBLU

) do not distribute dividends at present.

Recently, Delta Airlines approved a $2 billion share repurchase
program that is expected to complete within 2016, in addition to
raising its 6 cents quarterly dividend by 50% to 9 cents per share
effective from the third quarter of 2014. The carrier plans to
return $2.75 billion to shareholders by the end of 2016.

Southwest Airlines has been leveraging from an improving U.S.
economy, which in turn is propelling stronger demand within the
domestic market. We believe the company is expected to benefit
further from fleet restructuring, introduction of international
services, repeal of the Wright amendment and the expected
completion of the AirTran integration.

Moreover, the slot wins and subsequent expansion of operations
from the Reagan and LaGuardia airports should boost its future
prospects. We thus remain bullish on the stock with a Zacks Rank #1
(Strong Buy).

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Its Southwest Airlines Co.’s (LUV) turn now to enhance its shareholders’ wealth just days after rival Delta Airlines Inc. (DAL) increased its own. The airline’s board of directors has approved a $1 billion share buyback program along with a 50% hike in its quarterly dividend to 6 cents per share from the prior-paid 4 cents.

The $1 billion share repurchase authorization includes a $200 million buyback program to be completed on an accelerated basis. Meanwhile, this is the 151st consecutive dividend payout for Southwest Airlines, which translates into an annualized dividend of 24 cents and a dividend yield of around 1%. The hiked dividend will be paid on Jun 25, 2014 to shareholders of record on Jun 4, 2014.

Recently, the company completed its previous $1.5 billion share repurchase program, which also included a $200 million accelerated share buyback launched in Feb 2014. During the first quarter of 2014, Southwest Airlines paid $56 million in dividends and repurchased 12 million shares for an approximate amount of $315.0 million.

This latest bid to enhance shareholders’ return depicts Southwest Airlines’ confidence in continuing its sturdy financial performance, already reflected in the impressive first-quarter results. To us, the increased shareholders’ return does not come as a surprise. The company’s bottom line has managed to beat the Zacks Consensus Estimate in the past three quarters with an average surprise of 8.51%.

Southwest Airlines is the second major air transportation carrier after Delta Airlines in terms of dividend payment as other traditional carriers like United Continental Holdings Inc. (UAL) and JetBlue Airways Corporation (JBLU) do not distribute dividends at present.

Recently, Delta Airlines approved a $2 billion share repurchase program that is expected to complete within 2016, in addition to raising its 6 cents quarterly dividend by 50% to 9 cents per share effective from the third quarter of 2014. The carrier plans to return $2.75 billion to shareholders by the end of 2016.

Southwest Airlines has been leveraging from an improving U.S. economy, which in turn is propelling stronger demand within the domestic market. We believe the company is expected to benefit further from fleet restructuring, introduction of international services, repeal of the Wright amendment and the expected completion of the AirTran integration.

Moreover, the slot wins and subsequent expansion of operations from the Reagan and LaGuardia airports should boost its future prospects. We thus remain bullish on the stock with a Zacks Rank #1 (Strong Buy).

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• Airline Industry
• Investment Company Information
• Delta Airlines
• Southwest Airlines

For Immediate Release
 
Chicago, IL – May 16, 2014 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Alaska Airlines Group Inc. (ALK–Free Report), Delta Airlines Inc. (DAL–Free Report), JetBlue Airways Corp. (JBLU–Free Report), Southwest Airlines Co. (LUV–Free Report) and Starbucks Corporation (SBUX–Free Report).
 
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Here are highlights from Thursday’s Analyst Blog:

Alaskan Airlines Tops Satisfaction Survey

In line with airline customer satisfaction scaling new heights in North America, Alaska Airlines Group Inc. (ALK–Free Report) has topped the 2014 survey conducted by J.D. Power for the seventh consecutive year. The carrier has also earned the leading position in terms of quality and usability of its frequent flier program.

J.D. Power’s 2014 North America Airline Satisfaction Study takes into consideration the response of 11,300 customers, who have flown across the continent in different traditional airlines between March 2013 and March 2014. These customers have ranked airlines on the basis of seven standards, which include fees, reservations, check-ins, aircraft, boarding/baggage and flight crew.

Alaska Airlines scored 737 points on a 1,000 point scale, which is 20 points more than last year and 44 points ahead of the second place occupant, Delta Airlines Inc. (DAL–Free Report). Overall passenger satisfaction from traditional airlines stood at 712, marking a 17 point increase over last year despite more fees for baggage check. Among low cost carriers, JetBlue Airways Corp. (JBLU–Free Report) has emerged as the winner with 789 points followed by Southwest Airlines Co. (LUV–Free Report) and Canada’s WestJet.

Meanwhile, in the loyalty program satisfaction report, the carrier was ranked on the basis of the ease of redeeming miles, account maintenance, reward program terms, ease of earning miles, benefits available and customer service. The report was based on the responses of 3,800 loyalty program members surveyed in March 2014.

The SeaTac-based company has leveraged from a high number of partner carriers and 700 global destinations. Loyal customers can earn and redeem points when they fly with one of Alaska Airlines’ partners or when they stay at one of its partner hotels. Further, the members can use a convenient online calendar to buy one-way award tickets over the net and book multiple airlines in one reservation.

We believe the J.D. Power study reaffirms the confidence that customers hold in the Alaska Airlines brand name despite rising fees and uncomfortable sitting remaining a constant concern for the fliers. It will also help strengthen its goodwill against other traditional carriers in the region.

Alaska Airlines reported better-than-expected earnings of $1.28 per share in the first quarter of 2014 handily beating the Zacks Consensus Estimate of $1.20. The company also recently approved a $650 million share repurchase program to boost its shareholders’ wealth.

Alaska Air currently carries a Zacks Rank #1 (Strong Buy).

Starbucks to Expand in Latin America

Starbucks Corporation (SBUX–Free Report) recently announced its plans to expand its Latin American presence by opening stores in Colombia, Bolivia and Panama this year and early next. Currently, Starbucks operates more than 500 stores in Latin American countries like Chile, Mexico and Argentina.

As announced in August last year, Starbucks will open its first store in Colombia in the capital city of Bogota in mid-summer 2014. The coffee giant plans to open more cafés in the city as well as in other major Colombian cities over the next five years. The Colombian cafés will serve only locally-grown espresso and coffee.

The Colombian cafés will be run by a joint venture between Mexican restaurant company Alsea, and Colcafe, a subsidiary of Grupo Nutresa (a Colombian food processing company). Both Alsea and Colcafe have been Starbucks’ Latin American business partners for the past few years.

Alsea operates more than 500 Starbucks stores across Mexico, Argentina and Chile. Starbucks has been manufacturing/roasting coffee with Colcafe in Colombia since 2008 and also developed its popular VIA Ready Brew. Starbucks has now expanded its manufacturing agreement with Colcafe to roast espresso, drip and packaged coffee to be supplied at the new Colombian stores.

After Colombia, the company will enter the Bolivian market, with the first store planned to be opened later this year. The first Starbucks café will come up in the commercial center of Santa Cruz in partnership with Starbucks’ long-time business partner in the Andean region, Delosi. The partners plan to open another 10 cafés in Bolivia over the next several years.

In Panama, the first store is scheduled to be opened in early 2015 in partnership with Corporación de Franquicias Americanas (:CFA), Starbucks’ long-time Central American business partner. The partners plan to open more than 20 cafés in Panama over the next several years.

Starbucks carries a Zacks Rank #3 (Hold).

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The aircraft was flying 38,000 feet when the pilot informed passengers over the intercom he would be making an emergency landing.

The Boeing 767-300, which was travelling from Atlanta to Los Angeles, landed in Albuquerque 15 minutes after the announcement was made.

There was no loss of cabin pressure during this time.

Jennifer Squires, who was a passenger on the plane at the time, told CNN: “I immediately thought someone was ill. A few minutes later he (the pilot) told us that because of pressure, the windshield in the cockpit arched, bubbled, and then shattered.”

.@Delta flight from Atlanta to Los Angeles diverted after windshield cracks
http://t.co/Zqn3M5H1Rj pic.twitter.com/4Em7OtTTKx

; WPTV (@WPTV) May 6, 2014

“As I exited the plane, I asked if I could see the damage,” Ms Squires, who also took the picture, said. “The pilot and co-pilot were in the cockpit, and I thanked them for getting us down safely.”

The Federal Aviation Administration stressed only the exterior pane had shattered, while the interior had stayed in tact.

“Our initial information was that the outside part of the windshield shattered but the interior part remained intact,” FAA spokesman Lynn Lunsford, told CNN.

“All windows and windshields are at least double paned,” Delta spokesman Morgan Durrant said. “This is a rare occurrence but the established procedure is to divert.”

The landing is the latest in a series of incidents for the airline. In March, one of their planes , which was carrying 179 passengers, lost a wing panel mid-flight.

Meanwhile in February, the airline incurred the wrath of online mothers by telling one woman she had to cover up before breastfeeding on a flight.

That same month, a flight had to be diverted while on route to Salt Lake City after a passenger became unruly and began screaming on the plane when her sexual advances were rejected by another pasenger.