Global air travel demand is more robust than expected so far in 2017 because of growing business and consumer confidence, according to IATA chief economist Brian Pearce. Pearce said the passenger traffic demand outlook looks strong for the remainder of the year, although he cautioned that airline profit margins are being squeezed by higher fuel and labour costs. The global economy is “looking fairly positive at the moment,” Pearce said. “In the last 6-9 months, we’ve seen a pretty strong and steady improvement in business confidence, and that’s always good for economic growth. Consumers have been getting confident after hitting a low patch about a year ago. That all adds up to a positive outlook. The industry overall is seeing [2017 passenger traffic] growth of 7%.” <br/>
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A4A member airlines are now committed to not removing a boarded passenger from an aircraft in a bumping situation and all are committed to ensuring crew being transported are booked in advance, A4A president and CE Nicholas Calio said. Calio said the recent incident in which United Airlines passenger David Dao was violently dragged off of an aircraft after being involuntarily bumped has led all US airlines, not just United, to thoroughly review policies. Calio noted that JetBlue already did not overbook flights before the United incident and Southwest has said it will stop overbooking in the current quarter. Calio acknowledged US airlines are trying to get ahead of potential regulations Congress is considering, and encouraged US lawmakers to refrain from imposing new regulations since the industry is taking action. <br/>
Airline passengers paid about US$1m more a day in baggage fees last year, according to figures released by the DoT. Baggage fees collected across the 25 largest US airlines in 2016 totaled $4.2b, up 10% from 2015. Not all fees climbed last year — fees collected for changing a reservation actually fell by 4% to $2.9b. Total passenger fares also dipped by a bit more than 1%, falling to $124.2b. Lower fares meant that revenue declined even though the number of passenger miles flown grew by 3%. Airlines as a group reported a total of $13.6b in profits, down 45% from 2015, despite the fact that fuel costs were lower in 2016. Those savings were mostly eaten up by higher labour costs. The report came the same day as executives from several of the nation’s airlines testified before Congress about their industry’s customer service. <br/>
Strong intelligence pointing to an "imminent threat" drove the decision in March to ban large electronics in carry-on baggage on flights into the US, according to a senior House Republican. "Specific and credible intelligence that there was an imminent threat to our aviation sector" was behind the decision, House Homeland Security chairman Mike McCaul said. "I think the administration took very responsible actions". The ban on electronics larger than iPhones applied to 10 airports in eight countries in the Middle East and North Africa. During congressional testimony April 5, Homeland Security secretary John Kelly did not rule out expanding the restrictions. "It's real. I think it's getting realer, so to speak," Kelly said. "We may take measures in the not-too-distant future to expand the number of airports." <br/>
Several lawmakers questioned Tuesday whether to move air-traffic control from the FAA to a private corporation, after recent airline debacles. Lawmakers also argued that occasional computer problems at multiple airlines force the cancellation of thousands of flights, for lack of technological investment by airlines. “I think the airline industry needs to focus on getting its own house in order, instead of extending its reach to control our skies,” said representative Peter DeFazio of Oregon. The committee approved a bill last year to privatise air-traffic control as a way to provide more stable funding than FAA, which has unpredictable annual appropriations from Congress. But neither the full House nor the Senate debated the measure. Congress expects a full debate this year because FAA policy legislation must be renewed by Sept 30. <br/>
Air traffic growth in India is likely to slow down marginally this fiscal from last year and profitability of airlines will be under pressure, rating firm Icra said Tuesday. The firm expects domestic passenger traffic to grow by 13-15% during 2017-18, backed by capacity addition and competitive airfares. In June last year, Icra has projected 20-25% domestic growth for 2016-17. The 2016-17 fiscal ended at 21.8%—the second consecutive year with 22% traffic growth. “Icra remains cautious about sustainability of industry profitability considering possible oversupply, resultant predatory airfares, susceptibility to adverse fuel prices and airport infrastructure bottlenecks. The rapid capacity addition…along with sizeable fleet expansion plans of various airlines in the near future might increase the competitive intensity further", Icra, said. <br/>
The Australian govt said it will develop a second airport for Sydney after the operator of the existing airport passed up its right to build the new airport. Sydney Airport Holdings, the operator of Sydney’s Kingsford Smith airport, has the right of first refusal to build the new airport at Badgerys Creek, west of the city, but said it “has not accepted the offer in the Notice of Intention to develop and operate the Western Sydney Airport (WSA).” “The risks associated with the development and operation of WSA are considerable and endure for many decades without commensurate returns for our investors,” Sydney Airport MD Kerrie Mather said. The Australian govt said it will now develop the new airport, with details to be announced in next week’s federal budget. <br/>