American Airlines joined rival United Continental in issuing a rosier outlook for Q2 — in the clearest sign yet that the recent spate of high-profile controversies over the treatment of passengers has done little derail the sector’s recovery from last year’s price war. Shares across the airline sector were lifted sharply higher to fresh or near record highs on Wednesday after American said it expects total revenue per available seat mile to rise between 5 to 6% in Q2 compared to the year-ago period. The company had previously forecast an increase of 3.5 to 5.5%. American attributed the higher guidance to strong demand for domestic and Latin American travel as well as a stabilisation in fare prices. The airline also raised its outlook for Q2 pre-tax margin to between 13-14%, from earlier estimates of 12-14%. The stock jumped 3.7% to $53.53 — their highest level since March 2015. The news comes a day after rival United Continental said it expected Q2 consolidated passenger unit revenue to be up about 2% from a year ago — the midpoint of the company’s original guidance for between 1 to 3%. <br/>
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The feud between American Airlines and Qatar Airways keeps escalating. First, American scoffed at the Mideast airline’s interest in buying as much as 10% of the US company. That prompted Qatar Airways CEO Akbar Al Baker to say his counterpart at American, Doug Parker, was “frightened” by the proposed investment. Then Al Baker found himself in the hot seat this week after disparaging US flight attendants as “grandmothers” and boasting that his own cabin crews had an average age of 26. He apologised Wednesday after a rebuke by unions and American, which called the remarks “both sexist and ageist.” The latest casualty is a marketing deal between the two companies, known as a codeshare, which American now says it will end because of a longstanding dispute over whether Persian Gulf carriers use government subsidies to compete unfairly. The US company privately notified Qatar Airways of the decision on June 29 -- a week after disclosing the Mideast airline’s overture to potentially become one of American’s largest shareholders. “They definitely are trying to send a message to Qatar that they don’t want Qatar involved in American,” said George Hamlin, president of Hamlin Transportation Consulting. American said it would also end a marketing agreement with Etihad Airways. The end of the codeshare deals won’t have a significant financial impact, American said. Etihad said it was “disappointed” with American’s exit from the codeshare pact and rejected allegations it violated any air-transportation agreements.<br/>
IAG has pleaded for the EU to overhaul its “arcane” airline ownership laws, which rivals and analysts warn could force the owner of British Airways and Iberia to buy out a quarter of its shareholders or risk being broken up after Brexit. Willie Walsh, CE of IAG, told the European Parliament Tuesday he was “confident” the company’s structures would survive Brexit and meet the EU’s strict licensing rules. But, in his first admission of potential challenges ahead, Mr Walsh called for the UK and EU to reach a comprehensive air transport agreement that “should also clarify” that UK nationals would count towards the EU ownership requirements, even after Brexit. Walsh said the EU “operates under an arcane system regulating the ownership and control of airlines”, and called for the rules to be relaxed. “Those structures are unnecessary,” he said. “I would prefer to see a situation whereby we don’t have to replicate [them].” For an airline to operate routes within the EU, it must demonstrate that it is effectively owned and controlled by EU nationals, with at least 50% of its shares held by EU nationals. This poses a problem for UK airlines after Brexit, when their UK shareholders will no longer be classed as EU shareholders. Several independent estimates all point to IAG falling below 50% after Brexit, a problem shared with other airlines. Senior EU officials, analysts and rivals of IAG have told the Financial Times that, unless the UK and EU reach an agreement to waive the issue, IAG will be forced to spin off part of the group or buy out up to a quarter of its shareholder base in order to maintain lucrative EU flying rights. Andrew Lobbenberg, head of transport equities at HSBC, told the FT: “After Brexit, we think IAG will need to be demonstrably an EU-owned and controlled airline. But it is unclear how that gets to be the case.” <br/>
Airberlin plans to expand services at Dusseldorf by stationing 12 instead of 11 long-haul aircraft at the airport this winter, which will be used to provide additional flights to the US. “At Berlin-Tegel [Airport], we are adapting our capacities in line with the fragile infrastructure there and are reducing our long-haul fleet on site by one aircraft to five [Airbus A330-200s],” airberlin CEO Thomas Winkelmann said. Germany's second-largest airline will offer more intercontinental frequencies during the upcoming winter season and has expanded its range of US flight offerings with 63% more flights in Dusseldorf and 13% more in Berlin compared to the previous year. This winter, airberlin will operate 39 flights from Dusseldorf to North America.<br/>