Boeing will further increase the 737 production rate to 57 aircraft per month in 2019, citing robust demand for narrowbodies, but the manufacturer is also cutting 777 production to 7 aircraft per month in 2017. The 777 rate cut to be implemented next year, which will bring production down from the current rate of 8.3 777s built per month, follows on the heels Boeing’s decision to cut 747-8 production to just 0.5 aircraft per month starting in Sept 2016. The 777 production rate slowdown will occur as Boeing transitions to 777X production—the first 777X is expected to roll out in 2018 with service entry in 2020. But as widebody production rates come down, Boeing’s narrowbody build rate will continue to rise. Boeing had already planned to go from building 42 737s per month currently to 47 per month in 2017 and 52 per month in 2018. <br/>
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Consumers have benefited somewhat from the lowest jet-fuel costs in more than 12 years, but not nearly as much as the companies. While travellers are paying less on average for trips, base fares have remained essentially unchanged since 2014, according to CE Rick Seaney of FareCompare.com. Meanwhile, spot jet-fuel prices in New York harbour have tumbled 70% since the start of 2014, to 92 cents a gallon Tuesday. Prices hit 81 cents Jan 20, the lowest since Dec 2003. One reason why base fares haven’t fallen more: Collapsing oil prices haven’t triggered a major economic slowdown, which typically would quash demand. Airlines also are taking advantage of the lower costs to pay dividends, repurchase shares, reduce or refinance debt and add capacity. The average domestic fare should fall less than 1% in 2016. <br/>
For years, regional airlines, which now provide as much a 50% of departures for United, Delta, American and Alaska, now face new hurdles, which will finally force industry consolidation and failures as legacy partners shift flying back to their own mainline services. While this will have a huge negative impact on regional airlines, it will also mean that more communities will be abandoned, with bleak implications for smaller airports. Cowen and Company MD Helane Becker sees the importance of feeding passengers from outlying spoke communities to majors at the hub via regionals declining turning the entire reason for code-sharing with regionals back in the 1980s on its head. At that time, legacies wanted to capture the feed from surrounding communities to keep it out of rival aircraft. <br/>
International traffic for Russian airlines was down 15.8% in 2015 to 39.5m year-over-year (YOY), according to Russia’s Federal Air Transport Agency, Rosaviatsia. Domestic traffic was up 13.6% to 52.6m. The total number of passengers carried reached 92.1m, down 1.2% YOY. In December, international traffic was down 30.7%, due to the closure of Egyptian destinations, Turkey’s charter flight ban and the Transaero collapse. In November, traffic dropped 28.4%. In 2015, Russia’s Aeroflot carried 26.1m passengers, up 10.6%. Aeroflot Group—which also includes Rossiya Airline, OrenAir, Donavia, Aurora and Pobeda Airline—carried 39.4m in 2015, up 13.4% YOY. S7 Airlines carried 10.6m passengers in 2015, up 5.6%, 8.2m passengers were carried by Sibir branch and 2.4m by Globus. <br/>
Algeria has suspended flights to Tripoli, a few days after it detained hundreds of Moroccans trying to travel to Libya having arrived in the capital Algiers. Libya has become a regional concern since Islamic State militants gained ground there and called for foreign recruits, especially from North Africa. Algeria is an important US ally in its fight against armed groups in the region. The decision to suspend flights to Tripoli was taken by the Algerian civilian aviation authority, no reason was given for the suspension. Algerian officials did not say when they would resume flights to Tripoli. The authorities fear that Moroccans entering Algeria to then cross into Libya may be planning to reinforce the Islamic State militant group, which has set up a base in the Libyan city of Sirte, security analysts say. <br/>
International traffic on Asia-Pacific carriers grew 7.9% to 276.3m passengers in 2015, according to AAPA. Over 20m additional international passengers were carried by Asia-Pacific carriers in 2015, pushing the rate of growth in the sector to exceed 2014’s 4.9% year-over-year (YOY) growth by 3 points. Low oil prices pushed the region’s airlines to competitively lower their airfares, boosting passenger traffic in the region, AAPA said. “Long-haul travel markets prospered on the back of an improvement in economic conditions in selected advanced economies,” AAPA DG Andrew Herdman said, adding that regional travel demand also grew solidly in 2015, despite sluggishness in the Asia-Pacific economy and regional currency weaknesses. In 2105, international traffic at Asia-Pacific airlines rose 8.2% YOY to 1t RPKs total. <br/>
The cabinet Tuesday approved a budget of THB271.5m to speed up efforts to address aviation safety concerns, as proposed by the Civil Aviation Authority of Thailand. Transport minister Arkhom Termpittayapaisith said the budget is divided into two chunks -- THB170m for hiring air safety experts from the UK and the rest to provide training for 69 CAAT personnel. CAAT has decided to hire a British aviation consultancy to help oversee the aviation security system, especially to carry out air safety inspections and grant Air Operator Certificates, and help it meet the requirements of the ICAO. He said the Budget Bureau and the CAAT, which has replaced the defunct Department of Civil Aviation, are expected to hold talks about budget allocation details. <br/>