The EU is poised to kick off talks on far-reaching aviation agreements that will land its negotiators in between some fast-growing emerging-market airlines and those European and US carriers opposing their expansion. EU member states Tuesday are set to grant the EC, the bloc’s executive arm, the exclusive mandate to negotiate deals with the United Arab Emirates, Qatar, Turkey and members of ASEAN. The accords would replace a patchwork of bilateral pacts governing commercial flights. Airlines such as Air France-KLM SA and Deutsche Lufthansa AG argue that the Middle East carriers have benefited from state aid that has distorted competition. They have asked the EU to reset the competitive balance with foreign state-owned airlines—including Emirates Airline, Qatar Airways and Etihad Airways—which they say have received E39b in handouts between 2004 and 2014. The Middle East airlines deny the charge. “Some sort of equal playing field needs to be established so that we have open and fair competition,” EU Transport Commissioner Violeta Bulc said. The argument over fair competition echoes one playing out across the Atlantic, where US carriers are also trying to find regulatory leverage to peg back the growth of the Middle Eastern airlines. Bulc said the EU-level aviation agreements would give partner countries a “predictable, equal legal framework.” It also should spur growth. “Whenever we introduce a one-stop-shopping approach, it benefits both sides,” she said.<br/>
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Hawaiian Airlines CE Mark Dunkerley has spent decades in the aviation industry and seen many ups and downs. Asked to describe the current state of the market, he says: "I think it is hard to imagine, in general, better times than these." The oil price may have risen by 67% to around US$50 a barrel from a 12-year low of under US$30 a barrel in January, but compared with the US$145 high reached in 2008 it is still very reasonable. The IATA estimates fuel will represent less than 20% of the global operating cost for airlines for the first time since 2004, based on a forecast average of US$45 a barrel for the year. "Labour costs are probably the biggest cost now for many airlines after fuel prices have fallen," IATA chief economist Brian Pearce said. Industry profits are expected to rise to US$39.4b this year, after having more than doubled to US$35.3b last year, despite predictions the average fare price will fall by 7% as airlines add capacity. "The fact we have had more than a year of above-trend growth must be partly because of the sharp plunge in oil prices," Association of Asia Pacific Airlines director general Andrew Herdman says. "That means that fares have been falling as the benefits have been passed on to customers, but airline margins have improved." There was something of a consensus among the chief executives at the IATA annual meeting in Dublin last week that the oil price remains low in relative terms. Just how much the fuel price would have to creep back up to return to what is deemed "high" is less clear.<br/>
Airlines are becoming increasingly frustrated with Egypt over the country’s inability to repatriate ticket sale earnings, the industry’s top body warned. The IATA said Friday Egypt is not doing enough to reassure carriers. “Our members... are concerned,” IATA DG Tony Tyler said. “The volume of funds stuck in the country... is steadily growing.” The central bank reportedly “addressed” the concerns of airlines in March. However, IATA says Egypt is blocking the repatriation of $291m. “We have had various meetings [with Egyptian officials]. It is very important that these commitments are followed through on,” Tyler said. Egypt is facing a dollar shortage that has deteriorated since the 2011 revolution that ousted long-term president Hosni Mubarak. Its foreign currency reserves have more than halved since the revolution to $17.01b as of the end of April as it struggles to rebuild its tourism sector, a key source for foreign currency. The EgyptAir crash into the Mediterranean in May could put further pressure on people’s appetite to travel to the country that is already strained because of turmoil, including October’s bombing of a Russian passenger jet over the Sinai. Tyler warned the restrictions on funds are putting Egypt on a “slippery slope” and that airlines could start cutting flights if they are unable to take out their earnings.<br/>
Two state-of-the-art airport towers due to go into operation this fall in San Francisco and Las Vegas will first need extensive remodelling to make room for technology that dates backs to the early days of air traffic control, according to union officials. The new rooms on top of the towers where controllers watch aircraft operations were designed for equipment that helps controllers track planes electronically. But the prototype electronic strip system the Federal Aviation Administration plans to use is too unstable and “crashes” too often to be relied upon, said Paul Rinaldi, president of the National Air Traffic Controllers Association. This means that controllers need to quickly turn to the historic system of passing paper strips from one controller to another to hand off responsibility for a plane and carefully line up multiple strips to keep tabs on the status of flights. Here’s the problem: the tower “cabs” have been designed without the tables, printers and places to hang strips that are necessary for controllers to use the old system while still keeping an eye on planes, he said. This is an example of the larger problem that the FAA’s remodel of these towers relied on the assumption that the new technology would work. The FAA’s continued use of paper strips to track planes when air traffic control systems in many countries have long since moved to electronic methods is frequently cited by lawmakers and industry officials as an example of the agency’s often painfully slow adoption of new technology. The paper strips are more time-consuming, which slows the handling of planes. <br/>
Local government officials in Germany say they’re selling the lossmaking regional Frankfurt-Hahn Airport outside Frankfurt to a Chinese logistics and construction company. DPA reports that the finance ministry in Mainz, capital of the Rhineland-Palatinate region, said Monday it was selling its 82.5% stake to Shanghai Yiqian Trading Company for a sum described as in the low two-digit millions of euro. The neighboring Hesse region is completing negotiations for the sale of the remaining stake to the same buyer. The airport’s main user has been low-cost airline Ryanair. Dpa says that the new owners plan to expand freight activity, which has fallen off, as well as passenger traffic. <br/>
Bangkok's deficiency in airport capacity continues to irk the global airline industry, as the city was singled out at a yearly summit as the only Asian destination with serious problems. Tony Tyler, DG of IATA, on Thursday specifically named Bangkok among five cities facing a severe airport capacity crunch. The others are New York, London, Sao Paulo and Frankfurt, where congestion is critical and efforts to address the problem have fallen short of industry expectations. "Some governments understand that aviation infrastructure is a driver of national competitiveness. But too many have forgotten. We see that with bottlenecks in cities as far flung as New York, London, Sao Paulo, Frankfurt and Bangkok," Mr Tyler said. "In some cases we have the paradoxical situation of world-class airports on the ground and gridlock in the skies." But Tyler noted that authorities in China are working to improve the frustrating situation there. "The bigger question is, why aren't government decisions on infrastructure more motivated by seeing aviation as a force for good?" he asked. <br/>