Q4 and full-year 2015 results, which most carriers begin reporting this week, should reveal that the US airline industry will once again lead the world in terms of revenues and profits, Wall Street analysts and a credit-ratings agency believe. This year should be strong for the airline industry as a whole, with average profit margins expected to be around 10%, credit-ratings agency Moody’s said in a report. But the bright spot will remain in the US, which is expected to report 21% of the world’s airline revenues with profit margins well north of 10%, the agency said. These results are driven by the low price of fuel, strong domestic demand and US carriers’ relatively low exposure to currency risks. However, Moody’s notes that the strengthening US dollar could dampen demand for international travel. Also, the agency warns that a global recession, spike in oil prices or geopolitical events could change the outlook for US carriers. The industry should continue generating strong profits if airlines can continue resisting the temptation to add new routes simply because fuel prices are low, Wolfe Research analyst Hunter Keay said.<br/>
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Rayani Air had its maiden flight on Dec. 20, becoming the fourth carrier to follow Islamic tenets after Saudi Arabian Airlines, Royal Brunei Airlines and Iran Air. The airline, which doesn’t serve alcohol, offers halal food and requires Muslim female cabin crew to cover their heads, services five domestic destinations and has plans to fly overseas by 2017, said MD Jaafar Zamhari. It may seek loans or bring other investors on board and would eventually like to list on the stock exchange, he said. The company will compete for a portion of a Muslim $145b travel market that could expand to $200b by 2020, according to Singapore-based travel consultancy CrescentRating. That provides opportunities for financiers, with Saudi Arabian Airlines considering an IPO, while carriers including Emirates and Garuda have sold $12b of sukuk since 2008. “Muslim travelers are indeed looking for services and experiences which take their needs into account,” said Fazal Bahardeen, CEO at CrescentRating in Singapore. “There’s definitely growth potential for airlines” that prohibit alcohol, have halal food and provide prayer facilities, he said.<br/>
Spending on air traffic control operations has doubled over two decades, while productivity has declined substantially and efforts to improve performance have been ineffective, according to a report released Wednesday by a government watchdog. The report by the Transportation Department's inspector general blames the decline in productivity at air traffic facilities on a culture resistant to change within the Federal Aviation Administration and the agency's failure to adopt business-like practices. Lawmakers who want to remove air traffic operations from the FAA's control and turn them over to a nonprofit corporation pounced on the report as evidence the agency is incapable of modernizing its air traffic operations. The FAA has been engaged for more than decade in transitioning from a radar-based air traffic control system to one based on satellite navigation. Decades of personnel, organizational and acquisition reforms have failed to slow the agency's cost growth, improve its productivity or improve its performance in modernizing air traffic operations, said Rep. Bill Shuster, R-Pa., chairman of the House Transportation and Infrastructure Committee. "This report shows that the FAA simply isn't suited to successfully modernize our nation's antiquated air traffic control system," he said. "The FAA remains a vast government bureaucracy, not a high-tech service provider."<br/>
Airfares for passengers flying in and out of Britain jumped 46% from November to December, the Office of National Statistics revealed in its inflation report for 2015. The monthly increase was the largest since 2002, and considerably higher than the 19% jump over the same period in 2014, the ONS said. Crude prices, which had been at $45.47 a barrel at the start of November, fell below $41 by the end of 2015. US passengers fared better. Falling oil prices and fierce competition forced fares down for most of 2015, and flight costs were only slightly higher in December versus November, according to travel research group Harrell Associates. In the UK, it's not unusual to see ticket prices jump when schools are closed for holidays, but the 46% increase shows that fares are "highly variable" despite the steep fall in oil prices, said the ONS.<br/>The agency said airfares were the biggest single contributor to inflation, what little there was. UK inflation came in at 0.2% for 2015.<br/>
A winter storm is headed for the East Coast and is expected to disrupt travel throughout the mid-Atlantic and the Northeast — and beyond — beginning Friday morning. The National Weather Service has issued a blizzard watch for Washington, DC, and Baltimore and is monitoring the possible impacts of the storm, which are expected to include heavy snow extending from Washington, DC, to New York and Boston from Friday through Sunday. “Based on the anticipated storm track, as much as 1 to 2 feet of snow is possible near and northwest of I-95,” the NWS said Wednesday. Airports are readying their snow removal equipment and airlines are posting travel alerts. During events like this, most airlines will issue travel alerts offering passengers the option to cancel or change their travel plans with no change-fee penalties for certain days and for those traveling to, from or though certain cities. Story details what each carrier is offering.<br/>
The US trade agency nicknamed the “Bank of Boeing” could finance drones, converted cargo jets and aircraft maintenance services as it scouts for deals. The Export-Import Bank was reauthorized by Congress in December, months after financing lapsed and new transactions were halted. The bank is exploring additional lending possibilities, including drones that can scan pipelines, buildings and borders, said Robert Morin, the agency’s senior vice president for business and product development. “We’re just scratching the surface in terms of what is possible,” he said. Financing aircraft and jet engines for foreign customers of US companies remains a large part of the bank’s mission. Critics -- including congressional Republicans and the conservative Heritage Foundation think tank -- have said such deals amount to corporate welfare for Boeing and General Electric. The ex-im bank’s portfolio includes 1,125 aircraft backed by loans and guarantees valued at about $50b, Morin said.<br/>
The head of one of the world's biggest aviation fleets played down the risk of a price war over big jets like the Boeing 777 on Tuesday, saying its US manufacturer would rather sacrifice production than risk damaging its own portfolio. Aengus Kelly, CE of AerCap, the world's largest independent aircraft leasing company, said that Boeing would avoid reckless pricing of the current model in order to shield sales of the 777X, now in development. "If Boeing do deliver 777s at deeply discounted prices, they could cannibalize 777X sales. They would be borrowing from the future," Kelly said. "If demand isn't there and they have to drop the price precipitously to sell, then my view is they won't do it and they will instead cut production," he said. <br/>