Ryanair, Easyjet, Wizz Air and IAG submitted complaints to the EC against France Tuesday, arguing that its air traffic controllers’ strikes were restricting freedom of movement within the EU. European airlines have faced an increasing threat to profits this year from the cost of flight cancellations associated with air traffic control (ATC) strikes. The four airlines said they believed France was breaking EU law by not enabling flights over the country during strikes, meaning passengers flying between member states not affected by the action are being denied their freedom to travel. “The right to strike needs to be balanced against freedom of movement. Passengers on routes that overfly France, especially the large airspace that covers Marseille and the Mediterranean, are also subject to delays and massive disruptions,” IAG CE Willie Walsh said in a joint statement by the four. BA-owner IAG said last month that it was spending more on fuel to travel via alternative routes to bypass French airspace, describing the strikes as more of a threat to European airlines this year than a rise in fuel prices.<br/>
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JetBlue Airways will reduce capacity growth by about two points in the fourth quarter and cull unprofitable flying, as part of an effort to lift margins amid higher fuel prices. The capacity cuts will run through schedules in the "upcoming days" and will be effective September, says executive VP of commercial and planning Marty St George in an earnings call. JetBlue will re-deploy less profitable intra-west flying from its Long Beach focus city to transcontinental markets, and also cut off-peak flights on multi-frequency routes, he adds. The reallocation of the intra-west flying will drive about $30 to $40m of incremental run rate earnings, says CE Robin Hayes, with the benefit making a meaningful impact beginning in Q1 2019. JetBlue's plans to reduce service within the US west coast is the latest step in a retreat in that market, following its disappointment at Long Beach where it failed to win city council approval in early 2017 to begin international flights. This April, the airline announced it would slash a third of its flights out of the airport starting in early September. St George, who says the airline had "great hopes" for Long Beach, calls the intra-west market a "very tough yield environment".<br/>
Major US airlines are expected to change how their websites refer to Chinese-claimed Taiwan by Wednesday in an effort to avoid Chinese penalties, three sources said, after coordination between the carriers and the US government. Beijing has demanded that foreign firms, and airlines in particular, not refer to self-ruled Taiwan as non-Chinese territory on their websites, along with Hong Kong and Macau, a move described by the White House in May as “Orwellian nonsense”. China set a final deadline of July 25 for the changes, and last month rejected US requests for talks on the matter, adding to tension in relations already frayed by an escalating trade conflict. Numerous non-US airlines including Air Canada, Lufthansa and BA have already made changes to their websites, after China’s Civil Aviation Administration sent a letter to 36 foreign air carriers earlier in the year. A US airline executive briefed on the issue told Reuters that the US State Department notified China’s embassy in Washington late on Monday of the decision by US airlines to only list certain destinations by city on both Chinese and English websites, and not refer to Taiwan as a jurisdiction. Another source in Beijing said he was informed unofficially by the US government that airlines would only use certain city names in the future. A senior US government official said the change was ultimately the airlines’ choice to make.<br/>
Boeing played for time on its proposed new mid-sized jet at the Farnborough Airshow last week, announcing it would decide next year whether to launch its first all-new plane in a decade and giving itself 9-12 months to hone its business case. With 225-265 seats, Boeing's proposed new mid-sized airplane, or NMA, could fill an opening in the middle of the airplane market between the bread-and-butter single-aisle planes that dominate most fleets and the bigger long-range, twin-aisle jets. That niche has already been partially filled by rival Airbus' largest narrowbody, the bestselling A321neo. But Boeing insists the NMA would be able to open new routes due to longer range and superior economics, just as its 787 revamped long-haul travel by connecting secondary cities. To make business sense, the price must be low enough to lure airlines and high enough to leave a return for Boeing, while squeezing through a narrow economic gap in prices between single-aisle and twin-aisle planes. A key question is whether the gap is wide enough to take the plunge. "That is the challenge of the NMA," said John Plueger, CE of Air Lease Corp. "Building a business case in 2018 for an airplane that won't start in service until 2025 is not such an easy slam dunk."<br/>
A strong global economy and rising oil prices are expected to push up the cost of air travel in 2019, with fares seen rising 2.6% and hotel rates up 3.7%, although there are downside risks from a trade war, according to an industry forecast. In some countries, including India, New Zealand, Norway, Germany and Chile, airfares are expected to rise by more than 7%, said the annual business travel forecast from Carlson Wagonlit Travel (CWT) and the Global Business Travel Association (GBTA) released Tuesday. "Speaking for the Asia-Pacific region, we are coming off a period three to four years ago where there was a lot of capacity in the system (and) fares were down pretty significantly, potentially lower than was sustainable," said Michael Valkevich, CWT's VP for global sales & program management, Asia Pacific. "So I think we are getting to a bit more of a renormalization of sustainable fares." The IATA in June forecast passenger yields, a proxy for airfares, would rise by 3.2% this year in the first increase since 2011 as a stronger global economy drives growth in demand. CWT/GBTA predicted a 3.5% rise in airfares in 2018 in a forecast released last year.<br/>